In its annual report on the risk review and monitoring program, FINRA covered twenty-one different topics related to a company’s key compliance responsibilities. FINRA has added five new topics since last year’s report. New thematic areas include:
- Firm short positions and failures to receive municipal securities;
- Trusted contact persons;
- Funding portals and crowdfunding offers;
- Disclosure of routing information; and
- Portfolio margin and intraday trading.
For the topics covered, the report (i) identifies relevant rules, key considerations for member firm compliance programs, and notable findings from recent reviews, and (ii) describes effective practices that FINRA has observed over the course of its oversight while providing resources that member firms can assist in reviewing their procedures and fulfilling their compliance obligations. Some of the areas of interest highlighted in the report were:
- “FINRA’s Early Findings from Reg BI and Form CRS Reviews;
- compliance by firms with certain regulatory obligations related to:
- the Consolidated Audit Trail,
- better execution and
- NMS Rule 606;
- communication problems of certain mobile applications with customers and the supervision by the companies of the activity on these applications, in particular the controls around account openings;
- compliance by companies with their regulatory obligations with respect to securities activities involving special purpose acquisition companies;
- the growing number and sophistication of cybersecurity threats facing businesses and their customers; and
- corporate communications and disclosures made to customers regarding complex products. »
FINRA said the report is intended to be an up-to-date and evolving resource or library of information for businesses.
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