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FINRA Launches Campaign to Promote Trusted Contacts

September 29 2021
Volume 39

 
 
guidance

Guidance
  • Regulatory Notice
  • FAQ
upcoming

Upcoming Deadlines and Effective Dates
  • FINRA Elections
  • FINRA Requests for Comment
education

Education and Compliance Programs
 

In a combined effort to provide additional protection for investors, FINRA and the North American Securities Administrators Association announced a new campaign urging investors to provide their financial firms with a trusted contact. The U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy is also collaborating on this initiative. Financial firms are encouraged to share campaign resources with investors, and investors are encouraged to review the materials, ask questions and contact their firm to name a trusted contact.
 

Time is running out to add your name to the ballot for the upcoming Small Firm Advisory Committee and Regional Committee elections! Committee members play an important role by helping inform FINRA’s regulatory programs. See the Election Notices below for eligibility information and instructions on how to submit a candidate profile form by October 1.
 

FINRA announced the appointment of Sarah Gill as Ombudsman and Cindy Foster as Vice President of the Membership Application Program (MAP) and Statutory Disqualification. As the new Ombudsman effective October 4, Gill will handle issues, inquiries and complaints that arise from FINRA’s interactions with public investors, member firms, member firm employees, FINRA staff and other stakeholders. She succeeds Foster in the role. Foster, who had served as FINRA’s Ombudsman since 2009, was appointed to lead MAP, effective June 14.
 



FINRA’s Board of Governors met on September 23 – 24 and approved a proposal to establish a modest fee for individuals who choose to complete continuing education (CE) to remain qualified for up to five years following the termination of the individual’s registration. The Board also approved two rulemaking items and reaffirmed the organization’s Financial Guiding Principles.
 

 Guidance

FINRA Adopts Rules to Address Firms With a Significant History of Misconduct

FINRA has adopted new rules to address firms with a significant history of misconduct. New Rule 4111 (Restricted Firm Obligations) requires member firms that are identified as “Restricted Firms” to deposit cash or qualified securities in a segregated, restricted account; adhere to specified conditions or restrictions; or comply with a combination of such obligations. New Rule 9561 (Procedures for Regulating Activities Under Rule 4111) and amendments to Rule 9559 (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series) establish a new expedited proceeding to implement Rule 4111. The new rules and rule amendments, outlined in Regulatory Notice 21-34, become effective on January 1, 2022.

Reminder: New FAQ

FINRA has published new Frequently Asked Questions related to amended filing requirements of Rules 5122 and 5123 for retail communications regarding private placements. The new filing requirements, announced in Regulatory Notice 21-26, become effective on October 1, 2021.

 

 Upcoming Deadlines and Effective Dates

FINRA Elections

Election Notice 9/1/2021 notifies member firms of the upcoming nomination and election process to fill vacancies on FINRA’s Regional Committees. The Regional Committees play an important part of informing FINRA’s regulatory programs by, among other things, alerting FINRA to industry trends that could present regulatory concerns, and consulting with FINRA on proposed policies and rule changes. In this election, Regional Committees for the South and West regions each have six full-term vacancies, and the Midwest, North and New York regions each have four full-term vacancies to fill. Eligible candidates will be included on the appropriate ballot if they submit a candidate profile form to FINRA’s Corporate Secretary by Friday, October 1, 2021.

Election Notice 9/1/2021 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 North region and one representing the West region. The SFAC provides guidance to FINRA staff, particularly regarding the potential impact of proposed regulatory initiatives on FINRA’s small firm members. 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 Friday, October 1, 2021.

FINRA Requests for Comment

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.

FINRA is requesting comments on its Cloud Computing in the Securities Industry 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.

FINRA requests comment in Regulatory Notice 21-32 on a proposed change to its current policy relating to the assignment of OTC symbols to unlisted equity securities. Specifically, FINRA is considering whether it should begin assigning OTC symbols to unlisted equity securities that do not have a valid CUSIP identifier, in the limited circumstance where a member firm demonstrates its best efforts to obtain a CUSIP identifier and provides documentation to identify the security. Comments are requested by November 15, 2021.
 

 Education and Compliance Programs

Participate in our fall Virtual Compliance Boot Camps starting this October. These one-hour interactive virtual classroom sessions include training on a variety of topics including Cybersecurity and Anti-Money Laundering (AML) and provide an opportunity to learn from and work closely with FINRA subject matter experts in a small group setting. Participants gain valuable insights on compliance activities for immediate application in the workplace. Space is limited to 60 participants per session and is available on a first-come, first-served basis.

Register today for the 2021 Access and Impact Conference: Gauging the Participation of Diverse Communities in the Capital Markets on October 22. Join the FINRA Investor Education Foundation, FINRA's Office of the Chief Economist, and NORC at the University of Chicago for this free virtual event as panelists examine methods and impacts of increasing access or reducing impediments to the provision of financial services to diverse communities. View the agenda for more information and session descriptions.

Registration is open for the virtual Trading and Execution Member Forum on November 10. 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.

Register for all of FINRA’s upcoming events:

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Regulatory Contacts
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