This Report on FINRA’s Risk Monitoring and Examination Activities (the Report) is designed to inform member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations. For selected regulatory obligations, the Report: (1) identifies the applicable rule and key related considerations for member firm compliance programs, (2) summarizes noteworthy findings from recent examinations and outlines effective practices that FINRA observed during its oversight, and (3) provides additional resources that may be helpful to member firms.
The Report replaces two of FINRA’s prior publications: (1) the Report on Examination Findings and Observations, which provided an analysis of prior examination results, and (2) the Risk Monitoring and Examination Program Priorities Letter, which highlighted areas we planned to review in the coming year.
FINRA expects to revisit the Report annually, as we did with these prior publications. Many of the areas addressed in the Report represent ongoing core compliance responsibilities that are reviewed as part of our risk-based exam program each year. Where applicable, we will continue to evolve the information in these areas to address changes in business models, technologies, compliance practices, and other factors that may affect how regulatory obligations are fulfilled. Other areas addressed in the Report may be episodic or tied to a particular development, such as a new regulatory requirement or investment product. We expect to include these areas during the periods when they may be most relevant for member firms’ compliance programs.
FINRA welcomes feedback on how we can improve future publications of this Report. Please contact Ursula Clay, Senior Vice President, Member Supervision at (646) 315-7375, or by email, or Elena Schlickenmaier, Senior Principal Analyst, Member Supervision, at (202) 728-6920 or by email.
In Regulatory Notice 20-16 (FINRA Shares Practices Implemented by Firms to Transition to, and Supervise in, a Remote Work Environment During the COVID-19 Pandemic), we shared common themes FINRA noted through discussions with firms about the steps they reported taking in response to the pandemic and in connection with their move to remote work environments. This Report does not address exam findings, observations or effective practices specifically relating to how firms adjusted their operations during the pandemic. Those reviews are underway now and will be addressed in a future publication.
TABLE OF CONTENTS
- Firm Operations