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Uncertain Futures: 7 Myths About Millennials and Investing

October 10, 2018
Volume 41

  • Regulatory Notice
  • UPC Advisory

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment

Education and Compliance Programs

In the latest episode of A Few Minutes With FINRA, Chip Jones, FINRA’s Senior Vice President of Member Relations and Education, talks with Bari Havlik, FINRA’s Executive Vice President of Member Supervision, about the recent decision to consolidate FINRA’s examination and risk monitoring programs. The discussion includes an overview of FINRA’s plans to integrate three separate programs into a single, unified program to drive more effective oversight, reduce duplication and create a single point of accountability for the examination of firms.

A new research study sponsored by CFA Institute and the FINRA Investor Education Foundation debunks common assumptions about millennial investors. According to the research—Uncertain Futures: 7 Myths About Millennials and Investing—the majority of millennials lack confidence in financial decision-making and show little interest in robo-advisors. Despite coming of age in a digital world, they prefer to work face to face with a financial professional. “These findings help us better understand the needs and wants of millennials to further enhance investor education efforts that will engage millennials in the financial markets,” said FINRA Foundation President Gerri Walsh.

You can also listen to Walsh and Gary Mottola discuss the misconceptions and roadblocks millennials face in their paths to becoming investors. Part one of the two-part podcast is now available.

FINRA’s Board of Governors met on Sept. 26-27. The Board approved four rule proposals, which will be published by FINRA for comment or filed with the SEC. The proposals include:

  • potential amendments to expand time for non-parties to respond in arbitration;
  • an expansion of TRACE to include foreign sovereign debt securities;
  • potential amendments to margin requirements for Covered Agency Transactions; and
  • proposed amendments to FINRA’s Margin Rule to clarify the treatment of “When Issued” and other extended settlement transactions.

For more information about the discussions that took place during the meeting, please watch the September 2018 Board Report video or read FINRA President and CEO Robert Cook’s email.


SEC Approves Amendment to Require Alternative Trading Systems to Identify Non-FINRA Member Subscribers in TRACE Reports for U.S. Treasury Securities
Effective April 1, 2019, large alternative trading systems (ATSs) will be required to identify non-FINRA member subscriber counterparties in TRACE reports for transactions in U.S. Treasury securities using FINRA-assigned market participant identifiers (MPIDs). This information will be used for regulatory purposes, and will not be made public. See Regulatory Notice 18-34 for more information.

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

  • UPC #30-18 Nordea Bank ABP American Depository Shares (When Issued) (OTC Symbol: NRDBV)

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comments

FINRA has four open requests for comments.

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 requests comment from member firms and other interested parties on enhancements to the Securities Industry Continuing Education Program (CE Program) under consideration by the Securities Industry/Regulatory Council on Continuing Education (CE Council). These enhancements include the transition of the Regulatory Element program to a more focused and shorter learning requirement administered annually. The CE Council is also gathering feedback on the current Firm Element program and supporting resources as well as on the overlap of the Firm Element program with other firm training requirements. The program enhancements that are under consideration are published on the CE Council’s website and in Regulatory Notice 18-26. Comments are due November 5, 2018.

FINRA requests comment on a proposal to expand the summary firm data relating to over-the-counter (OTC) equity trading that FINRA publishes on its website by (1) publishing on a one-month delayed basis new monthly aggregate block-size trading data for OTC trades in NMS stocks executed outside an alternative trading system (ATS); (2) publishing aggregate non-ATS volume for all firms, by eliminating the existing de minimis exception; and (3) separately identifying firms’ volume of trading on a single dealer platform (SDP), by requiring firms to use a unique market participant identifier (MPID) when reporting their SDP trades to FINRA. The proposal is described in Regulatory Notice 18-28 and comments are due November 12, 2018.

FINRA released a white paper outlining recent regulatory technology (RegTech) developments within the securities industry and potential opportunities and implications these technologies may have for broker-dealers. FINRA highlights five areas where industry participants have most prominently leveraged RegTech innovations: surveillance and monitoring, customer identification and antimoney laundering compliance, regulatory intelligence, reporting and risk management and investor risk assessment. FINRA has requested comments and feedback from interested parties by November 30, 2018.

 Education and Compliance Programs

Register today for FINRA's upcoming AML Half-Day Seminar, which takes place November 6 in Boca Raton. The seminar is designed for AML compliance professionals from firms of all sizes who are new to their role, or who are looking to reinforce their understanding of regulatory requirements and compliance responsibilities.

Visit FINRA's website to learn more and to register.

The FINRA South Region Member Forum takes place October 18 in Atlanta, GA. Register today to engage in key discussions with FINRA staff and industry peers around the future landscape of the financial services industry, plus enjoy a fireside chat with FINRA President and CEO Robert Cook and FINRA Senior Vice President of Member Relations and Education Chip Jones. There is no cost to attend the forum. Register today.

The speaker roster is now available for the FINRA Small Firm Conference, which takes place November 7 – 8 in Santa Monica, CA. This year’s conference features a Fireside Chat with FINRA President and CEO Robert Cook, FINRA Executive Vice President of Member Supervision Bari Havlik, and FINRA Senior Vice President of Member Relations Chip Jones.

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

Equities & Fixed Income Small Firm Compliance Workshop
Tuesday, October 23, 2018
2 p.m. to 4 p.m. ET

FINRA Market Regulation is hosting a free two-hour compliance workshop to discuss regulatory issues impacting small firms that trade in the equities and fixed income markets. Topics include compliance-related areas of concern within the equities and fixed income industries, and changes in FINRA processes, particularly as they relate to small firms. FINRA Market Regulation staff, representing different practice areas, 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. 

Register for the workshop.

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 San Francisco and Denver districts. To see a complete list of events that may be in your area, review the compliance calendar.

FINRA is hosting several upcoming Half-Day Compliance Boot Camps across the country, each with different areas of focus. Visit FINRA's website for more information and to register.

Upcoming Half-Day Compliance Boot Camps:

  • October 18 | Jericho, NY
  • October 24 | New York, NY

Also coming up:

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