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Responses to the 2018 Risk Control Assessment (RCA) survey are now due Friday, June 22.

June 13, 2018
Volume 24

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

Education and Compliance Programs

The FINRA Investor Education Foundation Board of Directors approved initiatives at its June meeting to expand personal finance programs and services for adults and children, and particularly those in underserved communities. The Board approved a $2 million, three-year renewal of the Smart [email protected] library® initiative, including the continuation of an 11-year partnership with the American Library Association (ALA).

Responses to the 2018 Risk Control Assessment (RCA) survey are now due Friday, June 22. The RCA survey is an important part of FINRA's risk-based surveillance and examination programs. FINRA uses it to better understand the risks associated with the business activities in which individual member firms engage, the products and services they offer, and the kinds of clients and counterparties with which they deal. In addition, the RCA helps FINRA identify and assess the integrity of the controls intended to manage those attendant risk exposures.

Each firm’s executive representative and designated assistant was emailed a link to his or her firm’s unique RCA survey last month, with subsequent reminder emails over the past several weeks.


 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA has four open requests for comment:

  • Regulatory Notice 18-16 seeks comment on proposed rule amendments that would impose additional restrictions on member firms that employ brokers with a history of significant past misconduct. These brokers, while relatively small in number, may present heightened risk of harm to investors, and any misconduct by them also may undermine confidence in the securities markets as a whole. The rule proposals would strengthen the existing controls FINRA has applied to such brokers to further promote investor protection and market integrity. The new proposals are one part of FINRA’s initiatives to confront high-risk brokers. Comments are due June 29, 2018.
  • FINRA is conducting a retrospective review of Rule 3110 (Supervision), governing annual compliance meetings to assess its effectiveness and efficiency. Regulatory Notice 18-14 outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with this specific rule. Comments are due June 25, 2018.
  • FINRA has extended the comment period to June 22 for Regulatory Notice 18-10, which outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with this specific rule.
  • FINRA seeks comment on proposed rule amendments that would revise the quantitative suitability obligation under FINRA Rule 2111 (Suitability) to more effectively address instances of excessive trading in customers’ accounts. The proposed rule amendments would remove the element of control that currently must be proved to demonstrate a violation, but would not change the obligations to prove that the transactions were recommended and that the level of trading was excessive and unsuitable in light of the customer’s investment profile. See Regulatory Notice 18-13 for more information. Comments are due June 19, 2018.

FINRA Elections

  • FINRA will conduct a Special Meeting of large firms on Thursday, June 28, 2018, to elect one individual to fill a Large Firm Governor seat on the FINRA Board of Governors (Board). Large firms that are members of FINRA as of the close of business on Friday, June 8, 2018, are eligible to vote in this election. See Election Notice 6/11/18 for details about the special election process and candidates.
  • Petitions for candidacy are due July 9 for the annual meeting of FINRA firms to elect one Large Firm Governor, one Mid-Size Firm Governor, and one Small Firm Governor to the FINRA Board of Governors (FINRA Board). The election meeting will be held on or about Friday, August 17. A formal notice of the meeting, including the precise date, time and location, will be mailed to executive representatives on or about July 19, 2018. Eligible individuals who have not been nominated for election to the FINRA Board by the Nominating Committee may be included on the ballot for the election of governors by following the petition procedures set forth in the By-Laws and as further described in the Election Notice 5/25/18.

 Education and Compliance Programs

Compliance Boot Camp Fall Schedule
FINRA's Compliance Boot Camps provide a broad view of essential compliance concepts. Through a combination of self-study and classroom training, participants gain valuable insights on compliance issues for immediate application to the workplace.

FINRA is hosting several upcoming half-day compliance boot camps across the country this fall, 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 Fall Compliance Boot Camps and to register.

Upcoming Half-Day Compliance Boot Camps:

  • July 10, 2018 | Chicago, IL
  • July 10, 2018 | Nashville, TN
  • July 12, 2018 | Atlanta, GA
  • July 27, 2018 | Seattle, WA

FINRA is hosting a phone-in workshop and WebEx presentation on Thursday, June 14, 2018, from 4 p.m. – 5 p.m. ET, to preview the new TRACE Markup/Markdown Analysis Report and demonstrate its features. The report displays a firm's markup and markdown behavior compared to the industry and provides the underlying details used to calculate the markup or markdown. FINRA is introducing the new TRACE Markup/Markdown Analysis Report on the Report Center this summer.

To participate,
register on FINRA’s website. Dial-in and WebEx information will be provided to registrants in advance of the presentation.

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, Chicago, Denver, Dallas, Woodbridge, New Orleans, Kansas City, Los Angeles, and Atlanta districts.

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

Also coming up:

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