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FINRA Unscripted Podcast: New National Cause and Financial Crimes Detection Programs

May 27, 2020
Volume 21

 
 
guidance

Guidance
  • Regulatory Notice
upcoming

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment
  • Board of Governors Election
  • Annual Entitlement User Accounts Certification
education

Education and Compliance Programs

Tune in to the latest episode of the FINRA Unscripted podcast. On this episode, we meet Greg Ruppert, the new Executive Vice President of FINRA’s National Cause and Financial Crimes Detection Programs (NCFC), to hear about his background and his vision for the new team. Listen to the podcast.
 


FINRA’s Membership Application Program (MAP) group has implemented a new process for returning signed Membership Agreements upon completion and approval of a firm’s new or continuing membership application. Effective June 1, 2020, upon approval of an application, firms will be required to upload the signed Membership Agreement to Firm Gateway, rather than send it by email to MAP staff. Please note that not all applicants require a revised Membership Agreement upon approval of a continuing membership application. The MAP staff will advise applicants if revisions to the existing Membership Agreement are necessary. For more information on the application process, visit FINRA’s website.
 


FINRA’s new virtual conference panels provide a unique opportunity to hear the most up-to-date compliance information directly from industry and regulatory leaders right from the comfort of your home. Watch the latest panel on FINRA's Transformation of Member Supervision—Examination and Risk Monitoring Program to hear FINRA staff discuss the migration to examination by business model including the firm grouping structure, how the Risk Monitoring and Examination teams coordinate, and what firms can expect going forward.
 



FINRA is committed to providing guidance, updates and other information to help stakeholders stay informed about the latest COVID-19 developments. This week, FINRA:

  • Updated the frequently asked questions to address whether firms should document reliance on FINRA’s temporary relief.
  • Continued to update the State "Shelter-in-Place" and "Stay-at-Home" Orders page.

FINRA will continue to consider additional relief or adjustments as appropriate. For all of FINRA’s latest COVID-19 updates and answers to frequently asked questions, visit FINRA’s website.
 

 Guidance

FINRA Amends Rules Governing its Membership Application Program to Incentivize Payment of Arbitration Awards

FINRA amended its Membership Application Program (MAP) rules to create further incentives for the timely payment of arbitration awards by preventing an individual from switching firms, or a firm from using asset transfers or similar transactions, to avoid payment of arbitration awards. The amendments will address situations where: (1) a FINRA member firm hires individuals with pending arbitration claims, where there are concerns about the payment of those claims should they go to award or result in a settlement, and the supervision of those individuals; and (2) a member firm with substantial arbitration claims seeks to avoid payment of the claims should they go to award or result in a settlement by shifting its assets, which are typically customer accounts, or its managers and owners, to another firm and closing down. These changes, outlined in Regulatory Notice 20-15, become effective on September 14, 2020
.
 

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

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 has been extended to June 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 has been extended to June 30, 2020.

FINRA is inviting member firms that participate, or plan to participate, in the security-based swap (SBS) market to provide views and information with regard to broker-dealer SBS activities, including the application of FINRA rules to those activities. Any other interested party is also invited to submit views and information. For more information, including how to make a submission, please visit the FINRA website. FINRA would appreciate receiving responses by July 31, 2020.

Upcoming FINRA Board of Governors Election

The annual meeting of FINRA firms will take place on or about Friday, August 7, 2020, to elect one Large Firm Governor and one Small Firm Governor to the FINRA Board of Governors. Election Notice 5/8/20 announced the FINRA Nominating & Governance Committee nominees to fill these vacancies, and informed individuals not nominated by the Nominating Committee of the procedures for being included as an additional candidate on the ballot for these elections.
Petitions for candidacy due are June 22, 2020.

Annual Entitlement User Accounts Certification

FINRA's Annual User Accounts Certification Process is underway and will conclude July 20, 2020. During this period, Super Account Administrators (SAAs) for organizations with more than one user and/or administrator account must certify that individuals have the appropriate level of access to FINRA systems required to perform their job responsibilities or remove access if no longer required. This year, organizations with only an SAA account and no other users or administrators have the option to certify but are not required. For detailed information, refer to the Annual Entitlement User Accounts Certification Process page.

 

 Education and Compliance Programs

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!
 

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