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2021 Get SET — State Examiner Training Agenda

January 27-28, 2001 | Virtual

FINRA and NASAA are bringing securities regulators together for a joint virtual conference dedicated to training state securities examiners on conducting broker-dealer examinations. This collaborative, two-day event focuses on strategies and solutions to help examiners strengthen their skills and ability to protect the investing public. Day 1 is geared for examiners with 0-3 years of broker-dealer examination experience. Day 2 is structured for examiners with more than 3 years of broker-dealer examination experience. Examiners with any level of experience are welcome to attend both days.


Day One (Beginner Examiner Training) – January 27, 2021


2:00 p.m. – 2:10 p.m.

Welcome Remarks

Speakers: 

  • Robert Cook, FINRA President and Chief Executive Officer
  • Lisa Hopkins, West Virginia Securities Commission and NASAA President
  • Marni Gibson, Kentucky Department of Financial Institutions and NASAA Broker-Dealer Section Chair 

2:10 p.m. – 2:30 p.m.

Keynote Speaker: Greg Ruppert, Executive Vice President, National Cause and Financial Crimes Detection Programs (NCFC), FINRA Member Supervision

Speaker: 

  • Greg Ruppert, FINRA Member Supervision

2:30 p.m. – 2:45 p.m.

Break


2:45 p.m. – 3:35 p.m.

How to Identify Risks and Tailor Examinations to Look for Risks

Session Description:
During this session, attendees will learn how to effectively manage risks during the examination process. Our speakers will describe key challenges and effective practices for identifying risks and planning risk-based examinations. Emphasis will be placed on identifying red flags and discovery techniques.

Learning Objectives:

  • Explore how to identify and effectively manage risks when planning and executing examinations.
  • Describe key challenges and effective practices for risk-based examinations.
  • Identify red flags that may demonstrate risk.
  • Describe discovery techniques and other effective practices that are useful during risk-based examinations

Panelists:

  • Pamela (Pam) Cangelosi, FINRA Member Supervision 
  • Caroline (Carrie) Holmes, Florida Office of Financial Regulation 
  • Ted Luecke, CFE, FINRA Member Supervision 
     

3:35 p.m. – 3:50 p.m.

Break


3:50 p.m. – 4:40 p.m.

Protecting Senior Investors and Related Examinations

Session Description: 
Addressing senior investor and vulnerable adult protection issues is a crucial part of securities regulation. In this presentation, you'll learn about related FINRA Rules and state report and hold Laws. We'll also discuss how you can establish senior investor issues contacts, as well as resources that will help you determine if firm policies and procedures are adequate.

Learning Objectives:

  • Identify effective practices for examinations addressing senior investor and vulnerable adult protection issues.  
  • Establish a senior investor issues contact list (APS, law enforcement, etc.).
  • Discuss FINRA Rules 2165 (Financial Exploitation of Specified Adults) & 4512 (Customer Account Information).
  • Summarize state report and hold laws.
  • Outline resources available to help determine if firm policies and procedures are adequate. 
  • Identify financial exploitation and diminished capacity red flags.      

Panelists:

  • Brooke Hickman-Elgrim, FINRA Member Supervision 
  • Claire McHenry, Nebraska Department of Banking and Finance 
  • Michael (Mike) Paskin, FINRA Member Supervision 
  • Kristen Standifer, Washington State Securities Division

4:40 p.m. – 4:55 p.m.

Break


4:55 p.m. – 5:25 p.m.

Introduction to Complex Products

Session Description:
Investment products abound that offer alternatives to conventional stock and bond investments. These products are sometimes referred to as structured products or non-conventional investments. They tend to be both more complex—and riskier—than traditional investments, and often tempt investors with special features and higher returns than offered by basic investments. During this session, we’ll discuss what makes a product complex, general characteristics of complex products, and the special risks involved in investing in them.  
            
Learning Objectives: 

  • Define what is considered to be a complex product. 
  • Review complex product characteristics. 
  • Review the risks of chasing yields when investing in complex products.  

Panelists:

  • Marc Freeman, FINRA Member Supervision 
  • Andrea Seidt, Ohio Division of Securities

5:25 p.m.

Closing Remarks

Speaker:

  • Marni Gibson, Kentucky Department of Financial Institutions and NASAA Broker-Dealer Section Chair


Day Two (Advanced Examiner Training) – January 28, 2021


2:00 p.m. – 2:05 p.m.

Welcome Remarks

Speaker:

  • Sarah Gill, FINRA Office of Government Affairs

2:05 p.m. – 3:00 p.m.

Common Sales Practice Issues Regarding Non-Traded Products

Session Description:
During this session, we will discuss the risks associated with thinly traded products, such as REITS and private placements. We’ll explain the due diligence requirements, when the products may be appropriate, and related liquidity issues. The discussion will close with a review of the latest regulatory developments.
            
Learning Objectives:

  • Describe risks associated with non-traded REITS and private placements. 
  • Discuss risks associated with concentration of these products.
  • Explain liquidity needs of investors.
  • Discuss due diligence requirements and industry practices when recommending these products.
  • Identify the latest regulatory developments related to these products.

Panelists:

  • Jason Freeman, CFE, FINRA Member Supervision 
  • Marni Gibson, Kentucky Department of Financial Institutions and NASAA Broker-Dealer Section Chair
  • Debrah (Debbie) Winterstein, FINRA Member Supervision

3:00 p.m. – 3:15 p.m.

Break


3:15 p.m. – 4:05 p.m.

Common Sales Practice Issues Regarding Exchange Traded Products

Session Description:
Clint Edgar leads this discussion of exchange traded products (ETPs) and how you can best examine sales of these products. You will learn about the risks associated with non-traditional ETPs and suitability factors to consider in the sales of these products to retail customers. We will review a case study of these products, review how to identify problematic trading in the products, and discuss how to evaluate records to investigate problematic trading activity in ETPs in order to develop your case. 

Learning Objectives:

  • Summarize risks associated with ETPs.
  • Assess suitability factors.
  • Identify records to review.
  • Evaluate records for reasonableness/red flags related to product recommendations.

Panelists:

  • Hannah Detwiler-Erwin, FINRA Member Supervision 
  • Clinton (Clint) Edgar, Texas State Securities Board 
  • Meaghan Reim-Strange, CFE, FINRA Member Supervision

4:05 p.m. – 4:20 p.m.

Break


4:20 p.m. – 5:10 p.m.

Variable Annuity Sales and Exchanges

Session Description:
A variable annuity is a contract between an investor and an insurance company in which the company provides a death benefit and promises to make periodic payments through annuitization in the future. The value of a variable annuity is determined by its underlying sub-accounts, similar to mutual funds, and various features may be added as riders to the contract. During this session, you’ll learn about suitability considerations and the supervision of variable annuities; as well as what you should focus on during examinations.
            
Learning Objectives:

  • Discuss how variable annuities work.
  • Review sales practice issues relating to exchanging variable annuities.
  • Discuss share classes. 
  • Explain suitability considerations relating to the sale of variable annuities.
  • Discuss effective supervision of the sales of variable annuities.
  • Summarize areas of focus for examinations of variable annuities and common examination deficiencies.

Panelists:

  • Eric Beck, CAMS, CFE, FINRA Member Supervision 
  • Kelly Edwards, FINRA Enforcement
  • Mark Kissler, Washington State Securities Division

5:10 p.m.

Closing Remarks

Speaker:

  • Sarah Gill, FINRA Office of Government Affairs