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Register Today for FINRA's Eighth Annual Diversity Summit

September 16, 2020
Volume 37

disciplinary actions

Disciplinary Actions


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

Education and Compliance Programs

Tune in to the latest episode of the FINRA Unscripted podcast. On this episode, we hear from Member Supervision's new head of Data Analytics and Technology Kerry Gendron to learn how FINRA is augmenting its examination and risk monitoring program through data analytics. Listen to the podcast.

Effective September 14, FINRA has amended the rules governing the Membership Application Program to further incentivize the 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. To assist member firms, FINRA has provided an overview of the Materiality Consultation process and a Mandatory Materiality Checklist.

IP Address Update. In order to improve the performance and reliability of FINRA Information Requests and FINRA Forms and Filings systems, FINRA will continue upgrading to Cloudflare service on September 19, 2020. To accommodate this change, firms who previously added Information Requests and Forms and Filings as trusted IP addresses will need to update them to ensure continued access to these systems. See Cloudflare’s IP address page for a complete list of Cloudflare IPs. There is no action required for firms who have not added our current IP addresses to their trusted list or have previously entrusted Cloudflare IPs. If your firm uses these systems, check with your IT department or call the FINRA Call Center at (301) 590-6500 with any questions.

Registration is now open for FINRA's eighth annual Diversity Summit. Reimagined as a virtual, week-long learning series, join us starting September 21 to hear from business leaders, diversity practitioners and human resource professionals in the financial services industry as they share ideas and effective practices to promote diversity, equity and inclusion in the workplace. Register today!

  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 requests comment in Regulatory Notice 20-29 on the practice of “pennying” in the corporate bond market. Consistent with a recommendation from the SEC’s Fixed Income Market Structure Advisory Committee (FIMSAC) and a similar request for comment published by the Municipal Securities Rulemaking Board (MSRB), FINRA is soliciting comment on how to define or identify pennying, how pennying impacts market quality and whether further regulatory action would be appropriate. The comment period expires October 16, 2020.

SEC Request for Comment on FINRA Rules

The SEC requests comment on FINRA’s proposal to eliminate the Order Audit Trail System (‘‘OATS’’) rules in the FINRA Rule 7400 Series and FINRA Rule 4554 (Alternative Trading Systems—Recording and Reporting Requirements of Order and Execution Information for NMS Stocks) once members are effectively reporting to the Consolidated Audit Trail (‘‘CAT’’) and the CAT’s accuracy and reliability meet specified standards. The comment period expires September 22, 2020. See the Federal Register notice.

Upcoming Effective Date

FINRA has amended its Rule 5110 (Corporate Financing Rule - Underwriting Terms and Arrangements) to make substantive, organizational and terminology changes to the rule, outlined in Regulatory Notice 20-10. The amendments to Rule 5110 modernize, simplify and clarify its provisions while maintaining important protections for market participants, including issuers and investors participating in public offerings. The implementation date for amended Rule 5110(a)(3)(A), (a)(4)(A)(ii) and (a)(4)(A)(iii) was March 20, 2020. The implementation date for all other provisions in amended Rule 5110 is September 16, 2020.

FINRA Elections

Election Notice 8/17/2020 notifies members of an upcoming election to fill two large firm seats and one small firm seat on the National Adjudicatory Council (NAC), and to announce the FINRA Nominating & Governance Committee nominees for these vacancies. Eligible individuals not nominated by the Nominating Committee who obtain the requisite number of valid petitions may be included as candidates on the ballot by following the petition procedures described in the Notice. Petitions for candidacy are due October 1, 2020.

Election Notice 9/1/2020 informs small FINRA member firms of the upcoming Small Firm Advisory Committee (SFAC) election. Two seats on the SFAC are up for election, one representing the South region and one representing the Midwest region. Any eligible candidate who wants to be included on the ballot must submit the relevant information via the candidate profile form to FINRA’s Office of the Corporate Secretary by October 1, 2020.

 Education and Compliance Programs

FINRA's 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 Financial and Operational Effective Practices. Join panelists as they discuss current financial and operational risks and issues that firms address in their day-to-day responsibilities. Attendees also learn effective practices taken by compliance and risk professionals to monitor financial and operational risks.

Reserve your spot at FINRA’s premier event, the 2021 Annual Conference. This conference takes place on May 18-20, 2021, in Washington, DC and provides the opportunity for practitioners, peers and regulators to exchange ideas on today's most timely compliance and regulatory topics. Register today to receive the maximum discount on conference registration rates.

Registration is open for the 2021 FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® Program. Week I takes place on July 18-23, 2021, and Week II takes place on November 14-19, 2021.Take advantage of our new reduced registration rates and gain your CRCP designation.

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Regulatory Contacts
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