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New OFI Report on Cloud Computing

August 18, 2021
Volume 33


  • Regulatory Notices
  • UPC Advisories
disciplinary actions

Disciplinary Actions


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

Education and Compliance Programs

CRCP small firm scholarship now accepting applications. FINRA is offering five scholarships to industry professionals from small firms to attend the FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® program. The scholarship covers full tuition for the entire CRCP program, including room and board. FINRA is accepting applications through September 17, 2021. For more information, including eligibility requirements, the selection process and application form, visit our website.

FINRA’s Office of Financial Innovation released a new report, Cloud Computing in the Securities Industry,” that explores the implications of cloud computing on the securities industry. FINRA also requests comments on the report, including areas where guidance or modifications to FINRA rules may be desired to support cloud adoption while maintaining investor protection and market integrity. Comments are requested by October 16, 2021.

Reminder: Firm Gateway, other system functionality retiring on August 21. Firm Gateway, Classic CRD Form U5 filing, and several other Classic CRD features are scheduled to partially or completely retire on August 21, 2021. If firms have not done so already, they should familiarize themselves with FINRA Gateway while their legacy-equivalent functionalities are still available to allow for a smooth transition. See the FINRA Gateway and Registration Filing in FINRA Gateway pages for more information.

FINRA Board of Governors Election. FINRA will conduct its Annual Meeting of firms on September 1, 2021. The purpose of the meeting is to elect individuals to fill one small firm seat, one mid-size firm seat and one large firm seat on the FINRA Board of Governors. Firms that are members of FINRA as of the close of business on July 30, 2021, are eligible to vote and an email containing voting instructions was delivered to executive representatives of eligible firms. See Election Notice 8/2/21 for information about the voting methods and candidate profiles.


FINRA Reminds Firms of their Supervisory Obligations Related to Outsourcing to Third-Party Vendors

Member firms are increasingly using third-party vendors to perform a wide range of core business and regulatory oversight functions. FINRA has issued Regulatory Notice 21-29 to remind member firms of their obligation to establish and maintain a supervisory system, including written supervisory procedures, for any activities or functions performed by third-party vendors, including any sub-vendors, that are reasonably designed to achieve compliance with applicable securities laws and regulations and with applicable FINRA rules. The Notice reiterates applicable regulatory obligations; summarizes recent trends in examination findings, observations and disciplinary actions; and provides questions member firms may consider when evaluating their systems, procedures and controls relating to Vendor management. This Notice does not create new legal or regulatory requirements or new interpretations of existing requirements.

FINRA Alerts Firms to a Phishing Email Campaign Using Multiple Imposter FINRA Domain Names

FINRA warns member firms in Regulatory Notice 21-30 of an ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA and using one of at least three imposter FINRA domain names (“”, “” and “”). The email asks the recipient to click a link to “view request” and provide information to “complete” that request, noting that “late submission may attract penalties.” FINRA recommends that anyone who clicked on any link or image in the email immediately notify the appropriate individuals in their firm of the incident. FINRA reminds firms to verify the legitimacy of any suspicious email prior to responding, opening any attachments or clicking on any embedded links.

UPC Advisories

The following UPC Advisories were published in the last week:

  • UPC #78-21: Telephone & Data Sys Inc (TDSLL)
  • UPC #79-21: Public Storage (OTC Symbol: PASQV)
  • UPC #80-21: Triton International (OTC Symbol: TTRNV)
  • UPC #81-21: Oxford Lane Capital Corp (OXLNP)
  • UPC #82-21: Public Storage (PASQL)
  • UPC #83-21: ConnectOne Bancorp Inc. (OTC Symbol: CNBOV)
  • UPC #84-21: Triton International Limited (TTRNF)
  • UPC #85-21: Textainer Group Holdings (OTC Symbol: TGHPV)
  • UPC #86-21: Pennymac Mtg Invt Tr (OTC Symbol: PMTCV)
  • UPC #87-21: ConnectOne Bancorp Inc. (CNBOL)
  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:

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA issued Special Notice 6/30/21 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 undertake. The comment period expires August 30, 2021.

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 has been extended to September 30, 2021.

SEC Request for Comment

On August 9, 2021, the SEC issued an order instituting proceedings to determine whether to approve or disapprove FINRA’s proposed rule change, as modified by Amendment No. 1, relating to security-based swaps. Comments are due August 30, 2021. Any rebuttals to comments filed with the SEC must be submitted by September 3, 2021. See the SEC Notice of Order.

Upcoming Effective Date

FINRA has amended its Membership Application Program (MAP) rules to address brokers with a significant history of misconduct and the brokers that employ them. The new rules require a member firm to submit a written request to FINRA’s Department of Member Regulation, through the Membership Application Group, seeking a materiality consultation and approval of a continuing membership application, if required, when a natural person seeking to become an owner, control person, principal or registered person of the member firm has, in the prior five years, one or more “final criminal matters” or two or more specified risk events.” These changes, outlined in Regulatory Notice 21-09, become effective September
 1, 2021.


 Education and Compliance Programs

Register today for FINRA’s 2021 Small Firm Conference on October 27 – 28, 2021. Virtual registration is now available! To ensure all attendees have the opportunity to participate in this year’s Small Firm Conference, you can now attend either in-person in Santa Monica, California or virtually from wherever you may be. Limited in-person seats available. Throughout this event, attendees have the opportunity to discuss small firm topics with FINRA senior staff. Highlights include detailed exchanges on industry and regulatory updates, and the opportunity for participants to share insights and effective practices. In addition, there will be valuable opportunities for networking with industry peers.

Save the date for these upcoming FINRA events:

  • Firm Grouping Member Forum: Capital Markets & Investment Banking | October 5, 2021 | Virtual
  • Compliance Outreach for Municipal Advisors | October 7, 2021 | Virtual
  • Access and Impact: Gauging the Participation of Diverse Communities in the Capital Markets | October 22, 2021 | Virtual

Register for these upcoming FINRA events:

  • FINRA Institute at Georgetown Certified Regulatory and Compliance Professional® Program
    Week II Waitlist | November 14 – 19, 2021 | Virtual + In-Person
  • 2022 FINRA Annual Conference | May 16 – 18, 2022 | Washington, DC
  • FINRA Institute at Georgetown Certified Regulatory and Compliance Professional® ProgramWeek I | July 17 – 22, 2022

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Regulatory Contacts
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