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FINRA Announced Today the Election of Three Governors to its Board of Governors

August 29, 2018
Volume 35

  • UPC Advisory

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

Education and Compliance Programs

FINRA announced today the election of three Governors to its Board of Governors:

Timothy C. Scheve, President and Chief Executive Officer of Janney Montgomery Scott LLC, was elected by large firms as a Large Firm Governor, one of three representatives of large firms on the Board. Scheve joined the FINRA Board of Governors in April, when he was appointed to fill an unexpired term.       

FINRA mid-size firms re-elected Brian J. Kovack, Co-Founder & President of Kovack Securities, Inc., as the Mid-Size Firm Governor. Kovack was first elected to the Board in 2015, and serves as its sole mid-size firm representative.

FINRA small firms elected Paige W. Pierce, Senior Vice President of Larimer Capital Corp., as one of three small firm representatives on the Board of Governors. Pierce is a former chair of the FINRA Small Firm Advisory Committee (SFAC).

The newly elected Governors join CalSTRS Chief Executive Officer Jack Ehnes as the newest members on the FINRA Board. Ehnes was appointed as a Public Governor in June to complete an unexpired term, which concluded at today's Annual Meeting. At its July Board meeting, the Board's Nominating and Governance Committee re-nominated and the Board re-appointed Ehnes to a full term on the Board, which begins today. CalSTRS – the California State Teachers' Retirement System – provides retirement, disability and survivor benefits for California's more than 930,000 pre-kindergarten through community college educators and their families.

For more information, please visit our website

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. 

In this episode, Phil Shaikun from FINRA’s Office of General Counsel and Jonathan Sokobin, FINRA’s Chief Economist, explain how lawyers and economists are working together to ensure FINRA’s rules are as effective and as tailored as possible. Plus, Shaikun and Sokobin give an inside look into how the FINRA Retrospective Rule Review process works, how rules are selected for review and the myriad of possible outcomes. Listen to the podcast.

CRCP Small Firm Scholarship Now Accepting Applications

FINRA is offering five scholarships to industry professionals from FINRA small firms (less than 150 registered reps) to attend the FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® program. The scholarship covers full tuition for the entire CRCP program, including room and board. FINRA is accepting applications through September 17, 2018.

For more information, including eligibility requirements, the selection process and application form, please visit our website.

The recording of FINRA's July 23 Small Firm Report, a conference call series dedicated to the unique regulatory challenges faced by small firms, is now available. If you were unable to join the live event, or would like to listen again, you can register for access to a recording of the call.

Join FINRA for the third call in a series of Securities Industry Essentials (SIE) Exam, Exam Restructuring and Registration Rule Consolidation conference calls hosted by senior leaders in FINRA’s Registration and Disclosure Department. This event will include an overview of the introduction of the SIE exam, the restructure of representative-level qualification exams, and the consolidation of registration rules that will become effective October 1, 2018. The call will conclude with a Q and A portion. Registration is open to the public; however, spots are limited. Senior Director Joe McDonald will discuss:

How FINRA’s qualification exam structure is changing;

  • What is covered on the SIE exam;
  • What effect the changes will have on current registrants;
  • How to enroll for the SIE exam; and
  • An overview of the consolidated FINRA registration rules.

Conference calls will be held:

September 5, 2018 – 10:30 a.m. – 11:30 a.m., Eastern Time (ET) (For Medium and Large Firms) (1 hour)

September 5, 2018 – 2:30 p.m. – 3:30 p.m., (ET) (For Small Firms) (1 hour)

To register for the calls or for more information about the SIE exam and exam restructuring, visit:



UPC Advisory
The following UPC Advisory was posted in the last week:

  • UPC #26-18 E-TRADE Financial Corporation – 5.875% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A and 5.300% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comments

FINRA published three requests for comments.

FINRA is requesting comment on proposed amendments to the Discovery Guide’s Firm/Associated Persons Document Production List to require firms and associated persons, upon request, to produce documents concerning third-party insurance coverage in a customer arbitration proceeding. The proposed amendments would strictly limit the circumstances under which insurance coverage information could be presented to the arbitrators. See Regulatory Notice 18-22 for more information. Comments are due September 24, 2018.

FINRA seeks comment on proposed amendments to the NASD Rule 1010 Series (Membership Proceedings). The proposal is the result of FINRA’s retrospective review of the MAP rules and processes, and is intended to reduce unnecessary burdens on new and existing firms, while strengthening investor protections. The proposed amendments would replace the NASD Rule 1010 Series with the proposed FINRA Rule 1100 Series (New and Continuing Membership). The proposed amendments would also include additional provisions to address regulatory issues FINRA staff identified and codify existing membership-related interpretations and practices. See Regulatory Notice 18-23 for more information. Comments are due October 5, 2018.

FINRA published a Special Notice seeking comment on how it can support financial technology (fintech) innovation consistent with its mission of investor protection and market integrity. The Notice builds on an initiative FINRA launched last year to improve communication with the securities industry around fintech. In addition, FINRA requests comment on certain fintech areas, including the provision of data aggregation services, supervisory processes concerning the use of artificial intelligence, and the development of a taxonomy-based machine-readable rulebook. The Notice requests comment by October 12, 2018.

SEC Request for Comment on FINRA Rules

The SEC has requested comment on two FINRA proposed rule changes.

The SEC requests comment on FINRA’s proposal to amend FINRA Rule 7730 (Trade Reporting and Compliance Engine (TRACE)) to modify the technological connectivity options available to members for reporting transactions to TRACE. Specifically, the proposed rule change would amend Rule 7730 to remove Computer-to-Computer Interface (‘‘CTCI’’) as a technological means of connectivity for use in reporting transactions to TRACE. The comment period expires September 13, 2018. See the Federal Register notice.

The SEC requests comment on FINRA’s proposal to amend FINRA Rule 6710 (Definitions) to modify the dissemination protocols with respect to Agency Debt Securities. The proposal would apply a $5 million dissemination cap to all Agency Debt Securities, regardless of the rating assigned to the security. The comment period expires September 13, 2018. See the Federal Register notice.

FINRA Elections

FINRA announced the nomination process to fill one Small Firm vacancy on the National Adjudicatory Council (NAC). Individuals interested in petitioning to become candidates must complete and submit a candidate profile form by September 26, 2018. See Election Notice 08/13/18.

 Education and Compliance Programs

FINRA Market Regulation is hosting an Options Industry Conference on Monday, September 17, 2018, from 2 p.m. to 4 p.m. Senior representatives from each of the options exchanges will participate in a panel discussion of regulatory issues across the options markets. A question-and-answer session will follow. Additionally, FINRA Market Regulation Staff will be available to answer questions.

Participants can attend in-person at FINRA's office at One Liberty Plaza in New York or participate over the phone. Pre-registration is required.

The Fixed Income Conference will be held September 13 in New York, NY. Register today and gain new insights from regulators, industry experts, peers and exhibitors. This year's conference features more than 25 speakers from various organizations, including a keynote address from Jack Brennan, chairman emeritus and senior advisor of The Vanguard Group, Inc.

Download the conference brochure, which includes the full agenda, session descriptions and confirmed speakers.

Register today for Week I of the 2019 CRCP program—which takes place July 21 – 26, 2019. The FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® Program—provides an executive educational experience that covers the theory and practical application of securities laws and regulation through intensive instruction, discussion and case studies.

Watch our latest video to learn more about the CRCP® program and get answers to the most frequently asked questions about the program. Visit FINRA's website for additional details and registration information.

This year’s FINRA Small Firm Conference, which takes place November 7 – 8 in Santa Monica, CA, features a Fireside Chat with FINRA President and CEO Robert Cook and FINRA Executive Vice President of Member Supervision Bari Havlik, and a keynote address from Mr. Cook.

Download the conference agenda and register today.

Register today for two upcoming Member Forums. The forums, designed for FINRA member firms, feature panel discussions around the future landscape of the financial services industry and provides opportunities to engage in key discussions with FINRA staff and connect with industry leaders and peers. There is no cost to attend the forums. Register today to attend a forum in your area.

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 list of upcoming events being held in the Boca Raton, Denver, Dallas, Woodbridge, Kansas City and Atlanta districts.

Review the compliance calendar to see a complete list of events that may be in your area.

FINRA is hosting several upcoming Half-Day Compliance Boot Camps across the country, each with different areas of focus. Review the list of upcoming July events, or visit FINRA's website for a full list of FINRA's Compliance Boot Camps and to register.

Upcoming Half-Day Compliance Boot Camps:

  • September 13 | Dallas, TX
  • September 18 | St. Louis, MO

Also coming up:

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