FINRA Releases Report on Use of 2018 Fine Monies

May 1, 2019
Volume 18
 
 
guidance

Guidance
  • Information Notice
disciplinary actions

Disciplinary Actions

 
upcoming

Upcoming Deadlines and Effective Dates
  • FINRA Request for Comment
  • SEC Request for Comment
  • Upcoming Effective Dates
education

Education and Compliance Programs


FINRA recently released its Report on Use of 2018 Fine Monies. The report describes how FINRA used the money from fines issued in 2018, in accordance with its Financial Guiding Principles. As detailed in the report, FINRA spent $81.1 million on fines-eligible expenditures in 2018. Such expenditures included the organization’s Enterprise Cloud Migration efforts, which moved various technology applications to cloud-based platforms, and the funding of operations and support for compliance resources for member firms.


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, FINRA’s Jason Foye and Blake Snyder discuss the role of FINRA’s Anti-Money Laundering Investigative Unit, how money laundering looks different in the securities industry, and more. Listen to the podcast.

 



Only two weeks left to register for the FINRA Annual Conference (May 15–17, 2019). This year’s event features more than 60 sessions, including special tracks related to trends in AML, cybersecurity, fixed income and much more.

Download the updated conference brochure, which includes the agenda, session descriptions and confirmed speakers. Space is limited, register today to attend in person or via live online broadcast.

 

 Guidance

Imposter Websites Impacting Member Firms

Several member firms have recently notified FINRA that they have been victims of imposter websites—which are sites designed to mimic a firm’s actual website with the end goal of committing financial fraud. Information Notice 4/29/19 outlines steps firms can take to monitor for imposter websites and what to do if an imposter website is found.
 

 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 that it has ordered New Jersey-based broker-dealer Buckman, Buckman & Reid, Inc. (BBR) to pay approximately $205,000 in restitution to seven customers for failing to reasonably supervise two former registered representatives who recommended excessive and unsuitable trades in multiple customer accounts. As part of the settlement, FINRA also required the firm to review and revise its supervisory system and written supervisory procedures. FINRA previously barred both registered representatives from the industry.

 Upcoming Deadlines and Effective Dates

FINRA Request for Comment

FINRA has issued Regulatory Notice 19-12 to request comment on a proposed pilot program to study changes to corporate bond block trade dissemination based on recommendations of the SEC Fixed Income Market Structure Advisory Committee (FIMSAC). Specifically, the proposed pilot is designed to study two primary changes recommended by the FIMSAC: an increase to the current dissemination caps for corporate bond trades, and delayed dissemination of any information about trades above the proposed dissemination caps for 48 hours. The proposed pilot incorporates these primary elements of the FIMSAC Recommendation and other features, including a control group, designed to support a meaningful analysis of the pilot’s impact. Comments are due June 11, 2019.


SEC Request for Comment on FINRA Rules

The SEC requests comment on FINRA’s proposal to amend FINRA Rule 6730 (Transaction Reporting) to provide members additional time to report to the Transaction Reporting and Compliance Engine (TRACE) transactions in U.S. Treasury Securities executed to hedge a primary market transaction, and to adopt a new modifier to identify such transactions. The comment period expires May 21, 2019. See the Federal Register notice.


Upcoming Effective Dates

The SEC approved a proposed rule change to amend FINRA Rule 4512 (Customer Account Information) to permit the use of electronic signatures for discretionary accounts and to clarify the scope of the rule. These changes, outlined in Regulatory Notice 19-13, become effective on May 6, 2019.

On April 8, 2019, FINRA filed with the SEC a proposed rule change (SR-2019-009) to adopt all remaining NASD Rules (including, among others, the Membership Series rules) as FINRA Rules in the consolidated FINRA rulebook without any substantive changes. In addition, the proposed rule change adopted the remaining Incorporated NYSE Rules and Interpretations in the consolidated FINRA rulebook without any substantive changes as a separate Temporary Dual FINRA-NYSE Member Rule Series. This temporary rule series, as the name suggests, applies solely to dual FINRA and NYSE members. Finally, the proposed rule change updated cross-references and made other non-substantive changes within FINRA rules, due in part to the adoption of new consolidated FINRA rules. The proposed rule change will become effective on
May 8, 2019.
 

 Education and Compliance Programs

Only three more weeks left to register for the 2019 Compliance Outreach Program for Municipal Advisors, which takes place Tuesday, May 21, 2019, in San Francisco, CA. This free one-day program is designed to provide an open forum for municipal advisory industry professionals to discuss current compliance practices with regulators and promote a more effective compliance structure for regulatory obligations of municipal advisors. The program is sponsored by the SEC's Office of Compliance Inspections and Examinations (OCIE), in coordination with the SEC's Office of Municipal Securities, FINRA and the MSRB.

Space is limited, register today to attend in person or via live video webcast.


FINRA is hosting several upcoming Half-Day Compliance Boot Camps, AML Half-Day Seminars and Cybersecurity Half-Day Seminars across the country.

Half-Day Compliance Boot Camps

  • May 23, 2019 | Dallas, TX
  • June 4, 2019 | Chicago, IL
  • June 14, 2019 | Tempe, AZ

AML Half-Day Seminar – June 4, 2019 | Costa Mesa, CA

Cybersecurity Half-Day Seminar – July 16, 2019 | Chicago, IL


FINRA's Registration and Disclosure (RAD) training team offers several training solutions designed for those at broker-dealer or joint broker-dealer/investment adviser firms. Training programs include:

  • Foundations of CRD Training (next session offered June 6–7, 2019, in Chicago, IL)
  • Registration and Disclosure Boot Camp (upcoming sessions will be announced soon)
  • Custom Web CRD Training (contact the RAD training team to inquire about a training session that is tailored to the needs of your organization.)

Visit FINRA's Web CRD Training and Support page to learn more. Space is limited, so please register early.


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. Upcoming events will be held in Boston on June 12, 2019 and Los Angeles on August 8, 2019.

Review the compliance calendar to see a complete list of events.


Registration is now open for the 2019 National Compliance Outreach Program for Broker-Dealers. The program, sponsored by FINRA and the SEC, is designed to provide an open forum for regulators and industry professionals to discuss current compliance practices and promote an effective compliance structure for the protection of investors. The event will be held on June 27, 2019, in Chicago, IL. Space is limited, so register early to secure your seat.


Also coming up:

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