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FINRA Releases 2019 FINRA Industry Snapshot

October 2, 2019
Volume 40


  • Regulatory Notices
  • UPC Advisories
disciplinary actions

Disciplinary Actions


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

Education and Compliance Programs

FINRA’s Small Firm Report is a free conference call series hosted by senior FINRA leaders who discuss trending topics, new rules and regulatory guidance and best practices. Register today for the next Small Firm Report to discuss Regulation Best Interest on Tuesday, October 8.

Tune in to the FINRA Unscripted podcast to hear FINRA leaders review existing and emerging regulatory topics that impact the broker-dealer industry, as well as other insights into the operations of FINRA.

On this episode of FINRA Unscripted, Lizzie Hogan, senior vice president of Market Regulation Enforcement, joins the podcasts to explain what her group does, how it fits under the broader Enforcement team umbrella and why market data cases matter. Listen to the podcast.

FINRA’s Financial Professional Gateway (FinPro) is a new, secure system designed to streamline registration and testing-related processes for firms and their associated individuals. FinPro provides direct access to resources and tools to help representatives manage their securities registration information. If your firm has not already begun onboarding its reps, start now to experience the benefits. Learn more and access support resources on our website.

All questions regarding FinPro should be directed to FINRA at (240) 386-4040 or [email protected].

FINRA published the 2019 FINRA Industry Snapshot, which includes data ranging from the size and geographic distribution of the firms FINRA regulates to the number of individuals in the industry, and from trading activity to how firms market their products and services. The Snapshot is designed to provide visibility into the broad range of firms, individuals and trading activity FINRA oversees.

The FINRA Investor Education Foundation, along with BBB and the Stanford Center for Longevity, released new fraud research that shows that the scams with the highest engagement and victimization rates involve online purchases and social media—outpacing telephone, mail and email fraud. In addition, individuals who are socially isolated or who have low financial literacy levels are more likely to lose their money to a fraudster. Read the report.


FINRA Amends Rules 2210 and 2241 to Conform to the FAIR Act of 2017

The SEC approved a proposed rule change to amend FINRA Rules 2210 (Communications with the Public) and 2241 (Research Analysts and Research Reports) to conform to the requirements of the Fair Access to Investment Research Act of 2017 (FAIR Act). As described in Regulatory Notice 19-32, the change creates a filing exclusion under Rule 2210 for investment fund research reports that are covered by SEC rules under the FAIR Act, and eliminates the “quiet period” restrictions in Rule 2241 on publishing a report or making a public appearance concerning such funds. The implementation date was August 16, 2019.

FINRA and ISG Announce the Update of Blue Sheet Data Elements

FINRA and the other U.S. members of the Intermarket Surveillance Group have updated certain data elements for Electronic Blue Sheets (EBS) to reflect the SEC’s December 21, 2018 approval of MIAX Emerald and the name change of Chicago Stock Exchange to NYSE Chicago, Inc. The updates, outlined in Regulatory Notice 19-33, are effective immediately.

Cybersecurity Alert: Cloud-Based Email Account Takeovers

Several member firms recently notified FINRA that they have experienced email account takeovers (ATOs) while using cloud-based email platforms, including Microsoft Office 365. Attackers used compromised email accounts to defraud member firms by requesting fraudulent wire requests or stealing confidential firm information or non-public personally identifiable information. Information Notice 10/2/2019 outlines the attackers’ tactics in executing ATOs, as well as steps taken by member firms to address ATO risks when using cloud-based email systems.


UPC Advisories

The following UPC Advisories were published in the last week:

  • UPC #30-19 Aegerion Pharmaceuticals, Inc. 2% Senior Unsecured Convertible Notes Due 08/15/2019
  • UPC #31-19 Quantum Fuel Systems Technologies Worldwide, Inc. (QTWWQ)
  • UPC #32-19 Argos Therapeutics Inc (ARGSQ)
  • UPC #33-19 Altaba, Inc. (Nasdaq Symbol: AABA)
  • UPC #34-19 Aceto Corporation (ACETQ)
  • UPC #35-19 Ditech Holding Corporation (DHCPQ)
  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 it has censured and fined UBS Financial Services Inc. $2 million for the firm’s repeated failures in timely addressing municipal short positions and in inaccurately representing the tax status of thousands of interest payments to customers. FINRA also required UBS to pay restitution to customers who may have incurred any increased state tax liabilities, to pay the IRS to relieve customers of any additional federal income tax owed, and to certify within 90 days that the firm has taken appropriate corrective measures.

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

In Regulatory Notice 19-06, FINRA requested comment on the effectiveness and efficiency of its rule on Business Continuity Plans and Emergency Contact Information. In addition to the feedback we received during the comment process, FINRA is seeking information through a voluntary survey. Participants will have until October 4, 2019, to respond.

FINRA is conducting a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes that help protect senior investors from financial exploitation. FINRA is interested in whether additional tools, guidance or changes to FINRA rules or administrative processes are appropriate to further address suspected financial exploitation and other circumstances of financial vulnerability for senior investors. Regulatory Notice 19-27 outlines the general retrospective rule review process, summarizes the rules and administrative processes that most directly apply to financial exploitation of senior investors, and seeks responses to a number of questions related to addressing financial exploitation. Comments are due October 8, 2019.

FINRA and the other participants of the Consolidated Quotation (CQ) Plan and the Nasdaq Unlisted Trading Privileges (UTP) Plan have issued a proposal for adding odd lot quotation information to the Securities Information Processor or “SIP” data feeds. The Plan participants are actively seeking input on the proposal, which is available on both the CTA website and UTP website. Comments are due by November 15, 2019.

FINRA Elections

FINRA has issued Election Notice 8/20/19 to notify members of an upcoming election to fill one large firm and one mid-size firm seat on the National Adjudicatory Council (NAC), and to announce the FINRA Nominating & Governance Committee nominees for these vacancies. Individuals interested in petitioning to become candidates must complete and submit a candidate profile form by October 4, 2019.

FINRA has issued SFAC Election Notice 9/4/2019 to inform small FINRA members firms of the upcoming Small Firm Advisory Committee (SFAC) election. One seat on the SFAC is up for election, representing the New York region. Any eligible candidate wishing to have his or her name included on the ballot must submit the relevant information via the candidate profile form to the FINRA Corporate Secretary by October 4, 2019.

FINRA has issued Regional Election Notice 9/4/2019 to notify member firms of the upcoming nomination and election process to fill vacancies on FINRA’s Regional Committees. 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 the FINRA Corporate Secretary by October 4, 2019.


 Education and Compliance Programs

The 2019 Small Firm Conference is SOLD OUT; visit our website to be added to the waitlist. If you are looking for other educational offerings, register today for the 2020 FINRA Annual Conference—which includes sessions designed specifically for small firms. If you plan to attend any of FINRA’s Conferences and Events, we encourage you to register early to secure your spot.

FINRA is hosting several upcoming Half-Day Compliance Boot Campsand AML Half-Day Seminars.

Half-Day Compliance Boot Camp

  • October 17, 2019 | Jericho, NY

AML Half-Day Seminars

  • October 8, 2019 | New York, NY
  • November 14, 2019 | Boca Raton, FL

District compliance events are designed for compliance and legal professionals at FINRA member firms, and offer an opportunity to hear about current regulatory issues while engaging with District Office staff. Review the compliance calendar to see a complete list of events.

FINRA’s 2019 Regulation Best Interest Conference will be held on December 18 in Washington, D.C. This one-day event is designed to bring regulators, executives and industry practitioners together to learn more about the SEC’s Regulation Best Interest (Reg BI). FINRA is offering free registration to the first two attendees from each firm. Register today to reserve your spot.

Also coming up:

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