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FINRA Publishes the FINRA Industry Snapshot 2018

August 15, 2018
Volume 33

  • Notices
  • UPC Advisory

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment

Education and Compliance Programs

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.

Haime Workie and Kavita Jain, talk about the Innovation Outreach Initiative and share their insights on the fintech innovations that are driving market activity around the world. Listen to the podcast.

To assist industry members with the implementation of the Consolidated Audit Trail (CAT), FINRA and the Exchange SROs have prepared a mapping table to demonstrate how current FINRA OATS FAQs map to CAT requirements.

FINRA published the FINRA Industry Snapshot 2018, its first annual statistical report on the brokerage firms, registered individuals and market activity that FINRA regulates. The publication includes data ranging from the size and geographic distribution of the firms FINRA regulates to the number of individuals in the industry, and from trading activity to how firms market their products and services. All of the data appear in aggregate form to respect the confidentiality of regulatory information.


FINRA Reminds Alternative Trading Systems of Their Obligations to Supervise Activity on Their Platforms
FINRA issued Regulatory Notice 18-25 to remind Alternative Trading Systems (ATSs) of their supervision obligations. As registered broker-dealers and FINRA members, ATSs—like other broker-dealer trading platforms—are required to maintain supervisory systems that are reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules, including, for example, rules on disruptive or manipulative quoting and trading activity.

Update to Security Futures Risk Disclosure Statement and Supplement
FINRA has released an updated Security Futures Risk Disclosure Statement to replace the one that was originally issued in 2002, and a new integrated supplement. The updated Security Futures Risk Disclosure Statement incorporates into the main body of the document the cumulative changes made to date. Among other changes, the Updated Statement reflects that the standard settlement cycle for most broker-dealer transactions is now two business days after the trade date (T+2) and the current cash limit protection of the Securities Investor Protection Corporation (SIPC). The new supplement integrates, in a single supplement, all the disclosure updates made through prior supplements released in 2010 and 2014, and the updated disclosures described herein. The implementation date of the Updated Statement and 2018 Supplement is September 5, 2018. See Regulatory Notice 18-24 for more information.

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

  • UPC #25-18 Oakridge Holdings, Inc. (OKRGQ)
 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 items on the website this week:

 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.

FINRA Elections

FINRA encourages all eligible small firm, mid-size and large firms to vote in the current FINRA Board of Governors election. Firms that were members of FINRA as of the close of business on Friday, July 20, 2018, are eligible to vote. The voting period concludes at FINRA’s Annual Meeting of firms that will take place on Tuesday, August 28, 2018. See Election Notice 7/23/18 for information about the voting methods and candidate profiles.

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

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.

Join us in New York this fall for two upcoming conferences. The conference brochures, which include the full agenda, speakers and session descriptions, are now available:

Each conference covers a range of topics and provides an opportunity to hear the most up-to-date regulatory information and effective practices. Register today.

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:

  • August 28 | Southfield, MI
  • September 13 | Dallas, TX
  • September 18 | St. Louis, MO

Also coming up:

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