FINRA's OFAC Tool to Be Retired

On January 3, 2023, FINRA’s OFAC search tool will be retired. As an alternative to the FINRA OFAC search tool, firms can use the United States Department of Treasury’s free OFAC tool (“Treasury tool”), which assists the public in complying with sanctions programs by facilitating the use of the Specially Designated Nationals and Blocked Persons list (the “SDN List”) and other sanctions lists administered by OFAC. For additional information regarding the Treasury search tool, firms can review the guidance posted by OFAC on its sanctions list search website and in its Frequently Asked Questions regarding the tool. Please contact OFAC if you have questions about the Treasury tool that are not addressed on these pages.
 

FINRA has promoted Jonathan Sokobin to Executive Vice President and Head of the newly created Office of Regulatory Economics and Market Analysis (REMA). Sokobin previously served as Senior Vice President and Chief Economist. He will remain Chief Economist and a member of FINRA’s management committee, continuing to report to FINRA President and CEO Robert Cook.
 

FINRA has adopted amendments to Rule 6730 (Transaction Reporting) in Regulatory Notice 22-27 to: (i) require members to report transactions in U.S. Treasury securities to FINRA’s Trade Reporting and Compliance Engine (TRACE) as soon as practicable but no later than 60 minutes from the time of execution; and (ii) require members to report electronically executed transactions in U.S. Treasury securities to TRACE in the finest increment captured by the system used to execute the transaction, subject to an exception for members with limited trading volume in U.S. Treasury securities.

FINRA published the Update on Sweep: Option Account Opening, Supervision and Related Areas—a follow-up to the August 2021 targeted examination ("sweep") of firms' practices and controls related to the opening of options accounts and related areas, including account supervision, communications and diligence. The update includes questions for firms to consider as they evaluate whether their supervisory systems are reasonably designed to address risks related to supervising the approval of options accounts—both self-directed and full-service brokerage accounts—and monitoring the trading activity in options accounts. This update builds upon FINRA’s ongoing commitment to provide transparency to member firms about our regulatory programs and initiatives, such as sweeps, to help them assess their compliance programs and address areas of concerns.

FINRA publishes disciplinary actions to remind registered representatives and firms of specific conduct that violates FINRA rules and may result in disciplinary action. FINRA recently published the November 2022 Monthly Disciplinary Actions.
 

FINRA Request for Comment

FINRA requests comment on Regulatory Notice 22-26, a proposal to provide additional transparency into delayed Treasury spot trades in corporate debt securities—i.e., corporate bond trades where the dollar price of the trade is based on a spread to a benchmark U.S. Treasury security that was agreed upon at an earlier time on the same day.

SEC Request for Comment

On November 10, 2022, the SEC issued an order instituting proceedings to determine whether to approve or disapprove FINRA’s proposal, as modified by Amendment No. 1, to amend the Codes of Arbitration Procedure to modify the current process relating to the expungement of customer dispute information. Comments are due December 7, 2022. Any rebuttals to comments filed with the SEC are due December 21, 2022. See the SEC Notice of Order.

On November 10, 2022, the SEC issued an order instituting proceedings to determine whether to approve or disapprove FINRA’s proposal to amend FINRA Rule 3110 (Supervision) to adopt new Supplementary Material .18 (Remote Inspections Pilot Program), a voluntary, three-year remote inspection pilot program to allow member firms to elect to fulfill their obligation under Rule 3110(c) (Internal Inspections) by conducting inspections of some or all branch offices and locations remotely without an on-site visit to such office or location, subject to specified terms. Comments are due December 7, 2022. Any rebuttals to comments filed with the SEC are due December 21, 2022. See the SEC Notice of Order.

The SEC requests comment on FINRA’s proposal to require members to: (i) publish order routing reports for orders in OTC Equity Securities; and (ii) submit both their existing order routing reports for NMS Securities and the new order routing reports for OTC Equity Securities to FINRA for publication on the FINRA website. Comments are due December 27, 2022. See the Federal Register notice.

Fee Increases

As a reminder, as detailed in our October 14, 2020 rule filing with the SEC, FINRA is implementing a proportional increase to fees it relies on to substantially fund its regulatory mission in a manner that preserves equitable fee allocation across FINRA members. This began in 2022 and will be phased in over a three-year period. For details on fee increases taking effect on January 1, 2023, please see the Fee Increase Schedule posted on our website.

2023 Renewal Program Payment Deadline Reminder: Dec. 12 is the deadline for Preliminary Statement payments. Firms can submit payment directly or reallocate funds to their Renewal Account through E-Bill. Please be aware that firms that fail to pay their Preliminary Statement may fail to renew in certain jurisdictions.
 

 Education and Compliance Programs

Compliance professionals at member firms are invited to join FINRA staff on December 8 for a demo of upcoming FinPro and FINRA Gateway system enhancements in support of rule changes regarding Continuing Education detailed in Regulatory Notice 21-41. Attendees are able to submit advance questions as part of the webinar registration process, and FINRA will answer selected questions during the session. Space is limited, and a recording will be made available in the future. Register to attend.

Firm compliance personnel who are new to registration and licensing—or would like to become more familiar with navigating related systems—are invited to join FINRA virtually for an upcoming Registration Systems Foundation training. These training sessions run from noon to 5 p.m. ET on two consecutive days.

Registration is now open for early 2023 sessions. See the Virtual Training Schedule & How to Register page for more information.

Register for all of FINRA’s upcoming events:

• CE Transformation: January 2023 System Enhancements | December 8 | 2-3 p.m. ET | Virtual
• FINRA Registration Systems Foundation Training | Virtual
  • January 25 – 26 | 12-5 p.m. ET
  • March 1 – 2 | 12-5 p.m. ET
• 2023 Annual Conference | May 16 – 18, 2023 | Washington, DC
• FINRA Institute at Georgetown Certified Regulatory and Compliance Professional^® Program | Washington, DC
  • Week I | July 16 – 21, 2023
  • Week II | November 12 – 17, 2023