Guidance
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Cash rebates issued to pension plan customers with respect to secondary market transactions in outstanding securities (under former Article III, Section 24, now Rule 2740 and IM-2740).
Background
Advanced data analytics is a critical function within FINRA and an important component of our efforts to be a risk-based and data-driven organization.7 This work, which supports our examination, surveillance and enforcement functions among others, is conducted in a number of areas throughout FINRA, but primarily within Market Regulation Surveillance, Research, Methodology, and Governance (SRMG), the Regulation Operations Advanced Analytics Team (AAT), the Office of the Chief Economist (OCE), and Technology.
Regulatory Obligations
Regulation SHO Rules 200 to 204 require firms to address risks relating to market manipulation, market liquidity and investor confidence by regulating excessive and “naked” short sales so that purchasers of securities from short sellers receive their securities positions in a timely manner. Regulation SHO requires firms to appropriately mark their securities orders; confirm that they have deliverable securities to complete short sale transactions; and have a process to close-out fails to deliver within the required timeframes.
The MSRB Due Diligence Report Card is a monthly status report to help firms monitor their issuances being brought to market in order to support firm's due diligence efforts. The report shows how many total issuances have been brought to market and which of those had issuers with previous issuances in the market that are lacking current audited financial filings (LCF) on EMMA. If any of the issuances being brought to market have a previously issued CUSIP LCF, then the current issuance is identified on this report card.
The report offers two alternative views:
Background
A critical part of the registration process in the securities industry is the background investigation of applicants for registration and the timely and accurate reporting of information to the Central Registration Depository (CRD) system via the Form U4 (Uniform Application for Securities Industry Registration or Transfer).
Timely and complete reporting of all information required by the FINRA By-Laws and rules, as well as the federal securities laws is critical. The Securities and Exchange Commission, FINRA, other self-regulatory organizations and state securities regulators use the information to make licensing and registration decisions, among other uses. FINRA also uses the information in BrokerCheck, which investors use for researching the professional backgrounds of firms and brokers.
Regulatory Obligations
Exchange Act Rule 15c3-1 (Net Capital Rule) requires firms to maintain net capital at specific levels to protect customers and creditors from monetary losses that can occur when firms fail.
The Registered Representative Composition Report is produced on a quarterly basis and displays trends in the profile of registered representatives associated with the firm. The report allows firms to compare their statistics to those of the industry. The data in this report comes from Web CRD®.
This report is generally published approximately 5 weeks after the last business day of the quarter. Users who have not opted-out of notifications will receive an email indicating that new reports have been published.
Background
FINRA administers qualification examinations that are designed to establish that persons associated with broker-dealers have attained specified levels of competence and knowledge pertinent to their function. Over time, the qualification examination program has increased in complexity to address new products and functions, and related regulatory concerns and requirements.
Background
The Military Personnel Financial Services Protection Act ("Military Act") was enacted to protect members of the U.S. Armed Forces from unscrupulous practices regarding sales of insurance, financial and investment products. Congress amended Section 15A(b) of the Securities Exchange Act of 1934 with the enactment of the Military Act to require FINRA, as a registered securities association, to adopt rules governing the sales or offers of sales of securities on the premises of any military installation to members of the U.S. Armed Forces or their dependents.1
The Customer Complaint Report is a quarterly report that displays trends in complaints reported to FINRA's Rule 4530 Application each quarter, pursuant to FINRA Rule 4530. Note: prior to July 1, 2011, complaints were submitted pursuant to NASD Rule 3070 and NYSE Rule 351. When a customer complaint is submitted to FINRA, the submitter must identify the product and problem classification detailed in the complaint. The report allows a firm to see their complaints in two views, by problem identified in the complaint and by product for which the complaint was submitted.
NASAA, the SEC, and FINRA co-hosted a free webinar on identifying and reporting the financial exploitation of senior investors. Firms can use this webinar to help train associated persons about how to identify and report financial exploitation of senior and vulnerable adult investors.
Q. What is a duplicate disclosure and how is a duplicate disclosure created?
Background
FINRA examines broker-dealers on a regular cycle basis, with firms posing greater risk receiving an examination more frequently. In connection with each of these examinations, FINRA prepares a report—which is available only to the relevant firm—addressing certain aspects of the firm's compliance with securities rules and regulations.