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Now Available: On Demand Sessions from FINRA's Virtual Diversity Summit

October 21, 2020
Volume 42


  • Regulatory Notice
  • Information Notice
  • UPC Advisory
disciplinary actions

Disciplinary Actions


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

Education and Compliance Programs

Reminder: Enhanced U4 filing experience available 10/31 in FINRA Gateway. Initial and amendment Form U4 filings will become available in FINRA Gateway starting October 31, and additional filing types will be made available over the coming months. All U4 filing types will continue to be available via classic CRD. FINRA encourages users to continue providing input that will inform enhancements to the FINRA Gateway, including the developing Form U4 experience. For more information visit our website.

Now available: On demand sessions from FINRA's 2020 Virtual Diversity Summit. FINRA’s 2020 Diversity Summit took place virtually September 21 – 24. Throughout the week, more than 500 participants learned from expert diversity thought leaders as they led focused discussions on the importance of embracing diversity, equity and inclusion as a strategic business priority. If you missed it, free recordings of all sessions are now available.

Register today for the 2020 FINRA Artificial Intelligence (AI) Virtual Conference and FinTech Office Hours. The Virtual AI Conference, on November 9, is a half-day event to bring together regulators and industry leaders within the financial industry to discuss the use of AI and related opportunities and challenges. The Fintech Office Hours, held on November 10, will be hosted by FINRA’s Office of Financial Innovation and are designed to engage with broker-dealers, vendors, and other market participants seeking to bring forth fintech innovations. This event provides a platform for discussions on market and regulatory implications and related benefits and challenges associated with innovations occurring in the financial industry. View the conference agenda and office hour schedule.


The National Adjudicatory Council (NAC) Revises the Sanction Guidelines

The NAC has revised the principal considerations in the Sanction Guidelines to expressly contemplate a customer’s age or physical or mental impairment that renders the individual unable to protect his or her own interests. The revised Sanction Guidelines, outlined in Regulatory Notice 20-37, are effective immediately.

Cybersecurity Background: Authentication Methods

A key element in any firm’s cybersecurity program is a robust authentication process, i.e., the method that confirms that an authorized user seeking access to a firm’s information technology systems is who they say they are. This process typically relies on one or more “factors,” such as a password or personal identification number (PIN) code, to provide the authentication. The importance of sound authentication techniques to protect investors’ and firms’ confidential information has increased in light of 1) escalating threats to the most commonly used form of authentication (single factor or password-based authentication) and 2) firms responding to the COVID-19 pandemic with work arrangements that typically require registered representatives to log in to their networks from a remote location. Information Notice 10/15/20 provides additional, non-exhaustive background on authentication techniques for firms to consider as they implement authentication programs.

UPC Advisory

The following UPC Advisory was published in the last week:

  • UPC #40-20: Chaparral Energy Inc. (CHAPQ)
  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 20-36 on a concept proposal regarding the application of FINRA rules to security-based swaps (SBS) following the SEC’s completion of its rulemaking regarding SBS dealers and major SBS participants. The comment period expires November 16, 2020.

FINRA requests comment in Regulatory Notice 20-33 on proposed formal procedures for bringing actions against non-associated persons who cheat or misbehave during a FINRA qualification examination. The proposed formal procedures—a new expedited proceeding rule—would also strengthen the existing processes for responding to cheating and misbehavior by associated persons during a FINRA qualification examination. FINRA also is proposing related amendments to FINRA’s registration requirements rule and eligibility proceedings rules. The comment period expires November 23, 2020.

FINRA requests comment in Regulatory Notice 20-34 on proposed amendments to Rule 2165 (Financial Exploitation of Specified Adults) to extend the hold period and to allow temporary holds on securities transactions to further address suspected financial exploitation of senior investors. The Notice also summarizes the retrospective rule review process, including the predominant themes that emerged from stakeholder feedback and resulting actions, and provides guidance to aid member firms and senior investors. The comment period expires December 4, 2020.

SEC Requests for Comment on FINRA Rules

The SEC requests comment on FINRA’s proposal to amend the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes to modify the current process relating to the expungement of customer dispute information. The comment period expires October 22, 2020. See the Federal Register notice.

The SEC requests comment on FINRA’s proposal to delete the rules related to the OTC Bulletin Board® Service ("OTCBB") and cease its operation, and to enhance the regulation of quotations in OTC Equity Securities by adopting new requirements for member inter-dealer quotation systems. The comment period expires October 28, 2020. See the Federal Register notice.

FINRA Elections

FINRA has issued two Election Notices to notify firms of elections to fill vacancies on various FINRA Committees. Election Notice 10/20/20 notifies firms of elections for FINRA Regional Committees, and the mailing of ballots to eligible firms. As detailed in the Notice, the District 2 seats on the West Region Committee are the only contested seats. The second Election Notice 10/20/20 notifies FINRA small firm members of the process to fill one South and one Midwest Region vacancy on the Small Firm Advisory Committee (SFAC). Ballots are due by Thursday, November 19, 2020.


 Education and Compliance Programs

Register today for the 2020 Small Firm Virtual Conference! This one-day conference will be held online on October 28 and will focus on effective practices and tips for complying with FINRA rules – from the unique perspective of small firms. The conference will bring together experts, executives and policymakers to share their specialized knowledge and experiences. PLUS – Don’t miss our virtual Office Hours and networking opportunities. View the agenda and office hour schedule.

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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