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Now Available: Rule 4111 Compliance Tool

June 8, 2022
Volume 23


  • Cybersecurity Alert
disciplinary actions

Disciplinary Actions


Upcoming Deadlines and Effective Dates
  • SEC Request for Comment
  • Election Notice

Education and Compliance Programs

The Rule 4111 Compliance Tool is now available in the FINRA Gateway. As explained in new Rule 4111 FAQ 8.1, this tool will provide, as they are issued, reports of: (1) the annual calculation of whether the member firm met the Preliminary Criteria for Identification, including its Preliminary Identification Metrics, as of the Evaluation Date for a given year; and (2) interim calculations as of an Evaluation Date for that given year. A description of the terms used in the reports can be found in the Rule 4111 Compliance Tool Glossary.

For questions regarding this resource or entitlement questions, please contact the FINRA Call Center at (301) 869-6699 or send an email to the Compliance Tools team. For more information about Rule 4111, see FINRA Regulatory Notice 21-34, Information Notice 2/1/2022, and the Protecting Investors From Misconduct Key Topic page.

FINRA appointed Michael Solomon as Senior Vice President of Examinations. He will be responsible for overseeing the strategic direction and execution of FINRA’s national Examination Program, assuming responsibilities previously held by Thomas Nelli, who retired from FINRA in March.

The Consolidated Audit Trail (CAT) NMS Plan Participants have determined to delay the full Customer Account Information System (CAIS) compliance deadline from July 11, 2022, to a date currently projected to be in the fourth quarter of 2022. For additional information, see Full CAIS Production Certification and Compliance Deadlines Extended.


Cybersecurity Alert

FINRA is alerting firms to a recent Microsoft alert that describes a remote code execution vulnerability, related to the Microsoft Support Diagnostic Tool (MSDT). The vulnerability can be used by a threat actor to run malicious code. FINRA recommends firms evaluate the Microsoft alert and take appropriate measures to protect against the reported vulnerability. For guidance or questions, please contact your firm’s assigned Risk Monitoring Analyst or NCFC’s Cyber Security Group (CSG).


 Disciplinary Actions

FINRA publishes disciplinary actions to remind registered representatives and firms of specific conduct that violates FINRA rules and may result in disciplinary action. FINRA posted the following disciplinary item on the website this week:

  • FINRA ordered Merrill Lynch, Pierce, Fenner & Smith, Inc. to pay more than $15.2 million in restitution and interest to thousands of customers who purchased Class C mutual fund shares when Class A shares were available at substantially lower costs.
 Upcoming Deadlines and Effective Dates

SEC Request for Comment

The SEC requests comment on FINRA’s proposal to amend FINRA Rule 6730 to: (i) require members to report electronically executed transactions in U.S. Treasury Securities to FINRA’s Trade Reporting and Compliance Engine (TRACE) in the finest increment captured by the system used to execute the transaction, subject to an exception for members with limited trading volume in U.S. Treasury Securities; and (ii) reduce the trade reporting timeframe for transactions in U.S. Treasury Securities to generally require reporting to TRACE as soon as practicable but no later than 60 minutes. Comments are due June 24, 2022. See the Federal Register notice.

FINRA Election

As announced in Election Notice 5/16/22, FINRA firms will elect one Large Firm Governor and one Small Firm Governor to the FINRA Board of Governors at FINRA’s annual meeting in August. The Election Notice also announced that a petition period is currently underway for individuals who meet the eligibility requirements described within the Notice to be included on the ballot. During the petition period, interested individuals may contact the executive representatives of member firms to solicit their endorsements to become additional candidates in the election, which starts in July. Please be aware that you may receive calls or emails from petitioners during this time. In addition, some emails will be sent through a new email distribution system rather than directly from petitioners’ personal email addresses. Petitions for candidacy are due June 30, 2022.


 Education and Compliance Programs

FINRA is hosting a virtual Registration Systems Foundation Training on June 29 and 30 and July 13 and 14. This virtual training held over two half-days, is designed for compliance personnel who are new to registration and licensing or need to become more familiar with navigating FINRA Gateway and related systems. Space is limited, so register today.

Week I of the 2022 FINRA Institute at Georgetown CRCP® Program is sold out and Week II is filling up fast. Reserve your spot now and join us in Washington, D.C., on November 13-18. View the Week II detailed schedule for a look at what sessions are being held and the participating faculty.

Thinking ahead and want to reserve your spot for next year? Registration for 2023 Week I is now open.

Register for all of FINRA’s upcoming events:

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