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FINRA Launches $30 Million Educational Initiative Aimed at Newer Investors

June 30, 2021
Volume 26


  • UPC Advisories
disciplinary actions

Disciplinary Actions


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

Education and Compliance Programs

FINRA and the FINRA Investor Education Foundation announced the launch of a multi-year, multi-faceted $30 million educational initiative to explore innovative ways to reach and educate investors, especially new, self-directed retail investors who conduct transactions through online accounts or using mobile apps. FINRA is soliciting input from firms, investors, investor advocates, academics and other stakeholders concerning effective ways to reach these new investors and will work with the FINRA Foundation to launch a comprehensive program aimed at educating this rapidly-growing segment of novice retail investors who are leveraging advancements in technology to enter U.S. securities markets. Read more about this new initiative.

"Addressing and Reporting Financial Exploitation of Senior and Vulnerable Adult Investors" is a free training that FINRA, the SEC and NASAA announced earlier this month in recognition of World Elder Abuse Awareness Day. Firms can use the training to educate employees and other affiliated persons on how to detect, prevent, and report financial exploitation of senior and vulnerable adult investors. The training is also a resource for firms implementing the requirements of the Senior Safe Act and certain state training requirements relating to senior investment protection.

Tune in to the latest episode of the FINRA Unscripted podcast. On this episode, we sit down with Blake Snyder, Senior Director of FINRA’s Financial Intelligence Unit, to learn about this new group, and how it is looking to transform how FINRA takes in, analyzes and shares data. Listen to the podcast.

FINRA released its 2020 Annual Financial Report, which describes how FINRA managed its finances in 2020. Read the report to learn more about the key drivers of FINRA’s 2020 financial performance.


UPC Advisories

The following UPC Advisories were published in the last week:

  • UPC #36-21: Sachem Capital Corp. Redeemable Preferred Stock Series A (When Issued) (OTC Symbol: SCMCV)
  • UPC #37-21: Chatham Lodging Trust Series A Cumulative Redeemable Preferred Shares (When Issued) (OTC Symbol: CLDTV)
  • UPC #38-21: CMS Energy Corp Depositary Shares Representing 1/1000 Interest Share Cumulative Redeemable Preferred Stock Series C (When Issued) (OTC Symbol: CMSEV)
  • UPC #39-21: Sachem Capital Corp. Redeemable Preferred Stock Series A (When Issued) (OTC Symbol: SCMCP)
  • UPC #40-21: Chatham Lodging Trust Series A Cumulative Redeemable Preferred Shares Ben Interest (When Issued) (OTC Symbol: CLDTP)
  • UPC #41-21: CMS Energy Corp. Depositary Shares Representing 1/1000th Interest Share Cumulative Redeemable Perp Series C Preferred Stock (When Issued) (OTC Symbol: CMSEP)
  • UPC #42-21: CTO Realty Growth Inc Preferred Stock (When Issued) (OTC Symbol: CTOPV)
  • UPC #43-21: Cadiz Inc. Depositary Shares (When Issued) (OTC Symbol: CDZAV)
  • UPC #44-21: New York Mortgage Trust Inc. Ser F Preferred (When Issued) (OTC Symbol: NYMFV)
  • UPC #45-21: Cadiz Inc. Series A Preferred Stock (When Issued) (OTC Symbol: CDZAP)
  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 announced that it has ordered Robinhood Financial LLC to pay approximately $70 million for systemic supervisory failures and significant harm suffered by millions of customers. The $70 million includes approximately $12.6 million in restitution, plus interest, to thousands of harmed customers. The sanctions represent the largest financial penalty ever ordered by FINRA and reflect the scope and seriousness of the violations.
  • FINRA announced that it has ordered Merrill Lynch, Pierce, Fenner & Smith, Inc. to pay more than $8.4 million in restitution to more than 3,000 customers who incurred potentially excessive sales charges in connection with early rollovers of Unit Investment Trusts (UITs). FINRA also fined the firm $3.25 million for failing to reasonably supervise early UIT rollovers.

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA continues to seek feedback on Rule 4530 as a part of its Retrospective Rule Review. The deadline for submitting responses to the voluntary survey is Friday, July 2. The survey was sent to each firm’s Executive Representative. For more information or for questions, contact [email protected].

FINRA is requesting comment on potential enhancements to its short sale reporting program in Regulatory Notice 21-19. FINRA is considering: (1) modifications to its short interest reporting requirements (Rule 4560); (2) a new rule to require that participants of a registered clearing agency report to FINRA information on allocations to correspondent firms of fail-to-deliver positions; and (3) other potential enhancements related to short sale activity. The comment period expires August 4, 2021.

FINRA issued a Special Notice seeking input from firms, investors, investor advocates, academics and other stakeholders who are knowledgeable about investor behavior regarding the most effective methods for educating newer investors. Comments will help inform and guide the investor education initiatives FINRA and the FINRA Investor Education Foundation (the FINRA Foundation) undertake.
The comment period expires August 30, 2021.

SEC Requests for Comment

The SEC requests comment on FINRA’s proposal relating to members’ filing requirements under FINRA Rule 6432 (Compliance with the Information Requirements of SEA Rule 15c2-11). Comments are due July 6, 2021. See the Federal Register notice.

The SEC requests comment on FINRA’s proposal to amend FINRA Rule 1240 (Continuing Education Requirements). The proposed rule change also makes conforming amendments to FINRA Rule 1210 (Registration Requirements). Among other changes, the proposed rule change requires that the Regulatory Element of continuing education be completed annually rather than every three years and provides a path through continuing education for individuals to maintain their qualification following the termination of a registration. Comments are due July 15, 2021. See the Federal Register notice.

The SEC requests comment on FINRA’s proposal to amend Rule 2165 (Financial Exploitation of Specified Adults) to permit member firms to: (1) extend a temporary hold on a disbursement of funds or securities or a transaction in securities for an additional 30-business days if the member firm has reported the matter to a state regulator or agency or a court of competent jurisdiction; and (2) place a temporary hold on a securities transactions where there is a reasonable belief of financial exploitation. Comments are due July 19, 2021. See the Federal Register notice.

FINRA Elections

The annual meeting of FINRA firms will take place on or about Wednesday, September 1, 2021, to elect one Large Firm Governor, one Mid-Size Firm Governor, and one Small Firm Governor to the FINRA Board of Governors. Election Notice 6/4/21 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 are due July 19, 2021.

 Education and Compliance Programs

Register for the virtual Diversified and Carrying & Clearing Member Forum on July 13. Firm Grouping Member Forums are free one-day events designed to provide financial professionals associated with FINRA member firms the opportunity to engage in key discussions with FINRA staff and connect with industry leaders and peers. The forums also include thoughtful discussions around the future landscape of the financial services industry and provide opportunities to meet one-on-one with FINRA Risk Monitoring Analysts, Directors, and Single Points of Accountability to discuss firm-specific questions.

FINRA’s virtual conference panels provide a unique opportunity to hear the most up-to-date compliance information directly from industry and regulatory leaders from the comfort of your home. Watch our latest panel today: Transformation of the Securities Industry Continuing Education Program. This session provides guidance and an update on the Securities Industry Essentials (SIE) qualification examination and revised representative-level qualification exams. Additionally, panelists discuss upcoming changes to the Securities Industry Continuing Education Program.

Register for these upcoming FINRA events:

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