Compliance Exams

FINRA regularly examines all firms to determine compliance with FINRA's rules and those of the SEC and the Municipal Securities Rulemaking Board (MSRB).

 

During a routine examination, FINRA examines those aspects of a firm's business that present heightened regulatory risk, as well as certain core areas. Specifically, FINRA examines a firm's books and records to see if they are current and accurate. FINRA analyzes sales practices to determine whether the firm has dealt fairly with customers when making recommendations, executing orders, and charging commissions or markups and markdowns; and scrutinizes a firm's anti-money laundering program, business continuity plans, and financial integrity and internal control programs. Similarly, firms go through a rigorous review for financial and operational compliance.

 

Routine examinations also seek to determine each firm's compliance with the anti-fraud provisions of the Securities Exchange Act of 1934, the Securities Act of 1933, FINRA's advertising rules and Regulation T of the Federal Reserve Board, which governs the extension of credit (margin) by brokers and dealers.