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FINRA Publishes Report on FINRA’s Examination and Risk Monitoring Program

February 3, 2021
Volume 5


  • Regulatory Notice
  • Information Notice
  • UPC Advisory

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment

Education and Compliance Programs

In a year when a pandemic gripped the world, beginning and experienced retail investors flocked to the stock market using taxable, non-retirement investment accounts, according to new research by the FINRA Investor Education Foundation and NORC at the University of Chicago.

FINRA has published the 2021 Report on FINRA’s Examination and Risk Monitoring Program to inform member firms’ compliance programs by providing annual insights from FINRA’s Examinations and Risk Monitoring programs. The Report combines and replaces two previously published annual reports, the Report on Examination Findings and Observations and the Risk Monitoring and Examination Program Priorities Letter. The Report is designed to give member firms a single, authoritative source that provides insights derived both from the last year’s examinations and risk assessments, and from where we have identified emerging issues for the coming year.


FINRA Modifies TRACE Dissemination Protocols for Specified Pool Transactions

FINRA has modified its Trade Reporting and Compliance Engine (TRACE) dissemination protocols applicable to agency pass-through mortgage-backed securities and Small Business Administration-backed asset-backed securities traded in specified pool transactions. The amendment, outlined in Regulatory Notice 21-02, will become effective on May
 17, 2021.

Exercise Cut-Off Time for Expiring Options

In Information Notice 2/3/21, FINRA reminds members that option holders who hold expiring options have until 5:30 p.m. Eastern Time (ET) on the day of expiration to make a final exercise decision to exercise or not exercise the option. Members may establish an earlier time to accept exercise instructions for customer or non-customer accounts but may not accept instructions after 5:30 p.m. ET. Members should ensure customers are aware of the cut-off time to exercise expiring options.

UPC Advisory

The following UPC Advisory was published in the last week:

  • UPC #10-21: First NBC Bank Holding CO. (FNBCQ)

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA welcomes feedback in Regulatory Notice 20-42 on lessons learned from stakeholders’ experiences during the COVID-19 pandemic, including the impact of changes made to member firms’ operations and business models, and the effectiveness of business continuity planning. FINRA further requests comment on whether it should consider changes to its rules, operations or administrative processes to address lessons learned during the pandemic or to address anticipated long-term impacts of the pandemic on member firms and investors. The comment period expires February 16, 2021.

In consultation with the U.S. Department of the Treasury, FINRA is soliciting comment in Regulatory Notice 20-43 on potential enhancements to the information reported to FINRA’s TRACE facility regarding transactions in U.S. Treasury securities. The comment period expires February 22, 2021.


 Education and Compliance Programs

FINRA's premier event — the 2021 FINRA Annual Conference — will be held entirely online. Join us virtually May 18-20 as practitioners, peers and regulators exchange ideas on timely compliance and regulatory topics. Nowhere else will you find this unique combination of the highest-caliber speakers discussing issues that matter most for the financial services industry. Register today and take advantage of our virtual pricing!

Virtual Compliance Boot Camps are one-hour interactive virtual classroom sessions that include training on a variety of topics including Cybersecurity, Anti-Money Laundering (AML), and Social Media and Digital Communications and provide an opportunity to learn from and work closely with FINRA subject matter experts. Select your sessions and register today.

Register today for the 2021 Small Firm Conference on October 27-28 in Santa Monica, CA. This event focuses on small firms’ practices and tips for complying with FINRA rules. Throughout the event, attendees have the opportunity to discuss small firm topics with FINRA senior staff.

Registration is open for the 2021 FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® Program. Week I takes place on July 18-23, 2021, and Week II takes place on November 14-19, 2021.Take advantage of our new reduced registration rates and gain your CRCP designation.


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