Regulatory Notice 17-13

FINRA’s NAC Revises the Sanction Guidelines

Effective Immediately

Executive Summary

This Notice advises FINRA firms of revisions to FINRA’s Sanction Guidelines. FINRA initiated a periodic review of the Sanction Guidelines through the National Adjudicatory Council (NAC) to ensure that the guidelines reflect recent developments in the disciplinary process, comport with changes in FINRA’s rules, and accurately reflect the levels of sanctions imposed in FINRA disciplinary proceedings. These revisions:

  • establish a new factor requiring that the exercise of undue influence over a customer be considered for all violations addressed by the Sanction Guidelines;
  • introduce three new Sanction Guidelines: Systemic Supervisory Failures, Short Interest Reporting, and Borrowing From or Lending to Customers;
  • present a new factor related to the mitigative effect of regulator or firm-imposed sanctions and corrective action;
  • amend 12 sections of the Sanction Guidelines to revise sanctions for more serious FINRA rule violations; and
  • harmonize the Sanction Guidelines to the relevant precedent, prior amendments to the Sanction Guidelines and FINRA’s rulebook consolidation process.

The revised Sanction Guidelines are effective immediately and available on FINRA’s website at www.finra.org/Industry/Enforcement/SanctionGuidelines.

Questions concerning this Notice may be directed to:

  • Alan Lawhead, Office of General Counsel, at (202) 728-8853; and
  • Jante Turner, Office of General Counsel, at (202) 728-8317.