Guidance

The Municipal Primary Offering Disclosure Report displays statistics about transactions your firm effected with customers during the securities’ Primary Offering Disclosure Period. This report is designed to aid firms in monitoring their compliance with Rule G-32(a) customer disclosure requirements, which apply to all broker-dealers selling offered municipal securities.

FINRA evaluates 11 broad risk categories as a foundation to monitor and assess member firm¹ risk and inform our risk-based examination program. We are sharing this risk framework and risk assessment methodology as part of our FINRA Forward Initiative to provide greater transparency into our risk assessment processes to further empower member firm compliance.

Regulatory Obligations

FINRA Rule 2090 (Know Your Customer) requires member firms and their associated persons to use reasonable diligence to determine the “essential facts” about every customer and “the authority of each person acting on behalf of such customer.” Regulatory Notice 11-02 (SEC Approves Consolidated FINRA Rules Governing Know-Your-Customer and Suitability Obligations) advised that firms verify the essential facts about a customer “at intervals reasonably cal

The MSRB Due Diligence Report Card is a monthly status report to help firms monitor their issuances being brought to market in order to support firm's due diligence efforts.  The report shows how many total issuances have been brought to market and which of those had issuers with previous issuances in the market that are lacking current audited financial filings (LCF) on EMMA.  If any of the issuances being brought to market have a previously issued CUSIP LCF, then the current issuance is identified on this report card.

The report offers two alternative views:

Background

Until mid-2017, FINRA maintained two distinct enforcement teams within the organization—one handling disciplinary actions related to trading-based matters found through our market surveillance and trading examination programs, and the other handling cases referred from other regulatory oversight divisions within FINRA, such as sales practice examinations and our Office of Fraud Detection and Market Intelligence. Through FINRA360, we analyzed stated firm concerns that these dual programs sometimes resulted in duplication of effort and inconsistency of results.

Regulatory Obligations

Regulation SHO Rules 200 to 204 require firms to address risks relating to market manipulation, market liquidity and investor confidence by regulating excessive and “naked” short sales so that purchasers of securities from short sellers receive their securities positions in a timely manner. Regulation SHO requires firms to appropriately mark their securities orders; confirm that they have deliverable securities to complete short sale transactions; and have a process to close-out fails to deliver within the required timeframes.

The Registered Representative Composition Report is produced on a quarterly basis and displays trends in the profile of registered representatives associated with the firm. The report allows firms to compare their statistics to those of the industry. The data in this report comes from Web CRD^®.

This report is generally published approximately 5 weeks after the last business day of the quarter. Users who have not opted-out of notifications will receive an email indicating that new reports have been published.

Background

Advanced data analytics is a critical function within FINRA and an important component of our efforts to be a risk-based and data-driven organization.⁷ This work, which supports our examination, surveillance and enforcement functions among others, is conducted in a number of areas throughout FINRA, but primarily within Market Regulation Surveillance, Research, Methodology, and Governance (SRMG), the Regulation Operations Advanced Analytics Team (AAT), the Office of the Chief Economist (OCE), and Technology.

Regulatory Obligations

Exchange Act Rule 15c3-1 (Net Capital Rule) requires firms to maintain net capital at specific levels to protect customers and creditors from monetary losses that can occur when firms fail.

The Customer Complaint Report is a quarterly report that displays trends in complaints reported to FINRA's Rule 4530 Application each quarter, pursuant to FINRA Rule 4530. Note: prior to July 1, 2011, complaints were submitted pursuant to NASD Rule 3070 and NYSE Rule 351. When a customer complaint is submitted to FINRA, the submitter must identify the product and problem classification detailed in the complaint. The report allows a firm to see their complaints in two views, by problem identified in the complaint and by product for which the complaint was submitted.

NASAA, the SEC, and FINRA co-hosted a free webinar on identifying and reporting the financial exploitation of senior investors. Firms can use this webinar to help train associated persons about how to identify and report financial exploitation of senior and vulnerable adult investors.