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FINRA Reminds Firms of Their Responsibilities for Supervising UTMA and UGMA Accounts

March 4, 2020
Volume 9


  • Regulatory Notice
  • UPC Advisory

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment
  • SEC Request for Comment

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, we hear how the CE Council and FINRA are working together to transform continuing education for broker dealers with a number of proposed changes, including moving to an annual CE requirement, working to reduce duplication between the firm and regulatory elements of continuing education and providing those who leave the industry a means of maintaining their qualification. Listen to the podcast.


FINRA and the SEC’s Office of Investor Education and Advocacy (OIEA) have issued an investor-focused bulletin that urges investors to consider adding a “trusted contact person” to their brokerage accounts. FINRA and the SEC’s OIEA developed this bulletin in response to firms’ requests to help clients understand the purpose of designating a trusted contact person for specified accounts, and to encourage clients to designate such a person. Firms may make this bulletin available to clients, for instance, by directing them to the FINRA website or distributing a printed version.


FINRA Reminds Member Firms of Their Responsibilities for Supervising UTMA and UGMA Accounts

Regulatory Notice 20-07 addresses the characteristics of Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) accounts and the responsibilities of member firms to supervise UTMA/UGMA Accounts.

UPC Advisory

The following UPC Advisory was published in the last week:

  • UPC #05-20 E-TRADE Financial Corporation – 5.875% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A & 5.3% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA is conducting a retrospective review of Rule 4530 (Reporting Requirements) to assess its effectiveness and efficiency. Regulatory Notice 20-02 outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with this specific rule. The comment period expires March 9, 2020.

FINRA’s Capital Acquisition Broker (CAB) rules provide a simplified rulebook for broker-dealers that engage only in limited capital advisory, corporate restructuring and private placement activities. FINRA is requesting comment on proposed amendments to the CAB rules, as described in Regulatory Notice 20-04, to make them more useful to CABs without reducing investor protection. The comment period expires March 30, 2020.

FINRA is requesting comment on a proposal to implement the recommendations of the CE Council regarding enhancements to the continuing education requirements for securities industry professionals. The proposal, described in Regulatory Notice 20-05, would change the: (1) Regulatory Element to provide annual training, make the content more relevant, incorporate diverse instructional formats, publicize the learning topics in advance and enhance the related management systems; (2) Firm Element to expressly recognize other training requirements, improve the guidance and resources available to firms and establish a content catalog; and (3) Continuing Education Program to enable individuals who terminate their registrations the option of maintaining their qualification by completing continuing education. The comment period expires April 20, 2020.

SEC Request for Comment on FINRA Rules

The SEC requests comment on FINRA’s proposal to amend the Code of Arbitration Procedure for Customer Disputes ("Customer Code") and the Code of Arbitration Procedure for Industry Disputes ("Industry Code") to apply minimum fees to requests for expungement of customer dispute information. The comment period expires March 18, 2020. See the Federal Register notice.


 Education and Compliance Programs

Register today for the West Region Member Forum on March 26, 2020 in San Francisco, CA. This one-day event, which feature sessions on key topics like the SEC's Regulation Best Interest, is designed to provide financial professionals in the region the opportunity to engage in discussions with FINRA staff and connect with industry leaders and peers.

Gain insight into key priorities at FINRA’s Annual Conference, which takes place May 12–14 in Washington, DC. Attend informative sessions on topics including cybersecurity, Regulation Best Interest, social media and more. PLUS—join us for an Opening Night Reception at the Smithsonian National Museum of Natural History. Register today!

Registration is open for the 2020 Small Firm Conference. The event will be held on November 11–12 in Santa Monica, California, and will bring together FINRA staff and industry peers for in-depth discussions on small firms' practices. Register early to receive discounted registration rates!

Save the Date for these upcoming FINRA events:

  • FINRA Institute at Georgetown Certified Regulatory and Compliance Professional® Program – Week I | July 19–24, 2020 | Washington, DC
  • Fixed Income Conference | September 24, 2020 | New York, NY (registration opening soon)
  • FINRA Institute at Georgetown Certified Regulatory and Compliance Professional® Program – Week II | November 15–20, 2020 | Washington, DC

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