FINRA Reminds Firms of the SEC’s Adoption of a Best Interest Standard of Conduct

August 7, 2019
Volume 32

 
 
guidance

Guidance
  • Regulatory Notice
upcoming

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment
  • Upcoming Effective Date
education

Education and Compliance Programs


Tune in to the FINRA Unscripted podcast to hear FINRA leaders review existing and emerging regulatory topics that impact the broker-dealer industry, as well as other insights into the operations of FINRA.

On this episode of FINRA Unscripted, Susan Schroeder, executive vice president and head of FINRA Enforcement, joins the podcast to discuss new guidance on credit for extraordinary cooperation. Listen to the podcast.

 


Register today for the upcoming Small Firm Report—a free conference call series hosted by senior FINRA leaders. The call takes place Monday, August 12 at 3 p.m. ET. FINRA Senior Vice President Chip Jones will be joined by President and CEO Robert Cook and Vice President Dave Chapman, as well as Senior Director of FINRA CAT Business Operations Paul McKenney, to discuss current progress and reporting obligations for the Consolidated Audit Trail. This event is open to all FINRA member firms.
 



FINRA reminds firms to register for CAT reporting. FINRA issued Regulatory Notice 19-19 to remind firms they must register with FINRA CAT, LLC for reporting to the Consolidated Audit Trail (CAT). Initial CAT registration ran through June 27, 2019. FINRA urges any member firm with a CAT reporting obligation that has not yet registered to do so as soon as possible so the necessary entitlements for CAT reporting can be established in time for testing, which is scheduled to commence in December 2019.

All questions regarding CAT registration should be directed to the FINRA CAT Helpdesk at (888) 696-3348 or [email protected].

 



FINRA encourages all eligible small and large firms to vote in the current FINRA Board of Governors election. FINRA will conduct its Annual Meeting of firms on Monday, August 19, 2019. The purpose of the meeting is to elect individuals to fill one small firm seat and one large firm seat on the FINRA Board of Governors. Firms that are members of FINRA as of the close of business on Thursday, July 18, 2019, are eligible to vote. See Election Notice 7/19/19 for information about the voting methods and candidate profiles.
 

 Guidance

FINRA Reminds Members of the SEC’s Adoption of a Best Interest Standard of Conduct

FINRA has issued Regulatory Notice 19-26 to remind members of the SEC’s adoption of a best interest standard of conduct for broker-dealers and a relationship summary (Form CRS) delivery obligation. As more fully described in the Notice, the SEC encourages firms to actively engage with SEC staff as early as possible as questions arise when planning for implementation. Firms may send their questions by email to [email protected]. FINRA also will assist members in their implementation of the best interest standard in various ways, including through a webpage where members can obtain information about the new rules.
 

 Upcoming Deadlines and Effective Dates

FINRA Request for Comment

FINRA has issued Regulatory Notice 19-22 to request comment on a proposal to expand the alternative trading system (ATS) volume data that it publishes on its website to include information on transactions in corporate bonds and agency debt securities that occur within an ATS and are reported to FINRA’s Trade Reporting and Compliance Engine (TRACE). Comments are due September 7, 2019.

FINRA has issued Regulatory Notice 19-25 to request comment on a proposal to expand TRACE reporting requirements to collect information on trades in foreign sovereign debt securities that are U.S. dollar-denominated. Issuance activity in these debt securities has accelerated in recent years and FINRA believes the proposal would provide important regulatory information on an increasingly active segment of the market. Under the proposal, trades in U.S. dollar-denominated foreign sovereign debt securities would be subject to same-day reporting and would not be disseminated publicly. Comments are due September 24, 2019.

Upcoming Effective Date

The SEC approved a proposed rule change to amend FINRA Rule 4570 (Custodian of Books and Records) to: (1) provide a member firm that is filing a Form BDW (Uniform Request for Broker-Dealer Withdrawal) the option of designating another FINRA member firm as the custodian of its books and records on the form; (2) clarify the obligations of the designated custodian; and (3) require the designated custodian to consent to act in such a capacity. These changes, outlined in Regulatory Notice 19-16, become effective on August 19, 2019.

 

 Education and Compliance Programs

Free on-demand recordings of sessions from FINRA's 2019 Annual Conference are now available to member firms and CRCP graduates.


Register today for the 2019 Institutional Conference on September 11 in New York. The event will bring together industry experts, executives and policymakers to discuss topics affecting institutional firms across the country. Download the conference brochure.


FINRA is hosting several upcoming Half-Day Compliance Boot Camps, AML Half-Day Seminars and Cybersecurity Half-Day Seminars across the country.

Half-Day Compliance Boot Camps

  • August 8, 2019 | Del Mar, CA
  • September 17, 2019 | Minneapolis, MN
  • September 17, 2019 | Baltimore, MD
  • September 25, 2019 | Stamford, CT

AML Half-Day Seminar

  • September 19, 2019 | Chicago, IL

Cybersecurity Half-Day Seminars

  • August 27, 2019 | Costa Mesa, CA
  • September 26, 2019 | Boca Raton, FL

District compliance events are designed for compliance and legal professionals at FINRA member firms, and offer an opportunity to hear about current regulatory issues while engaging with District Office staff. Upcoming events will be held in the Los Angeles, Woodbridge and Atlanta District Offices.

Review the compliance calendar to see a complete list of events.


Registration for Fall Registration and Disclosure (RAD) Training Sessions is now open. Space is limited, so register soon!

  • Foundations of CRD Training | September 23–24, 2019 | Rockville, MD
    This training is designed for broker-dealer (BD) firms or joint BD/investment adviser firms and will cover both classic CRD and new CRD functionality, registration and disclosure hot topics, plus an overview of IARD.
  • FINRA Registration and Disclosure Boot Camp | September 25–26, 2019 | Rockville, MD
    This training is designed for those who are new to reporting disclosure information in CRD or those who want to receive refresher training and reporting tips.
  • Buy One, Get One Half Off: Attend both trainings for a reduced price. To receive the discount, register for one of the classes; the discount code to register for the other class will be included in your email confirmation. The discount is non-transferable.

The 2019 Small Firm Conference takes place on October 23–24 in Santa Monica, California. This event brings together FINRA staff and industry peers for in-depth discussions on small firms' practices. Register today to hear from FINRA leaders, including CEO Robert Cook and Executive Vice President of Member Supervision Bari Havlik. View the conference agenda for additional details.


Also coming up:

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