Guidance

Clarification of NASD Notice to Members 94-44 to situations in which a dually registered person maintains discretionary trading authority, determines portfolio changes, and prepares trade instructions for customer accounts and charges the accounts an asset-based fee.

Whether a proposed standby purchase agreement entered into between affiliate of a member and an issuer in connection with a public offering of the issuer's common stock could constitute an option.

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

FINRA promotes the capital-raising process through appropriately tailored rules that are designed to promote transparency and to establish important standards of conduct for the benefit of all market participants, including investors and issuers participating in offerings.

Question 1

Does FINRA Rule 3210 impose any requirement as to what specific information or data an employer member must review or monitor upon receiving duplicate copies of confirmations and statements, or the transactional data contained therein, with respect to an account subject to the rule?

Answer

The TRACE Quality of Markets Report Card for Treasuries is a monthly status report for treasuries transactions that a firm reported to the Trade Reporting and Compliance Engine (TRACE). Firms are required to report trades in accordance with established FINRA rules and regulations. Firms should make no inference that the staff of FINRA has or has not determined that the information contained on the TRACE Quality of Markets Report Card does or does not constitute rule violations.

Overview

The following tool identifies key cybersecurity risks currently facing small firms and helps them enhance their customer information protection, and cybersecurity written supervisory programs (WSPs) and related controls, including:

Background

An important part of FINRA's work involves providing investors the information and tools they require to make informed decisions about their assets and avoid dealings with bad actors. Several respondents to the Special Notice on Engagement issued in March 2017 provided a range of recommendations related to FINRA's efforts in the area of investor education—including the types of investor education content we develop and our dissemination strategies.

The Cross-Market Equities Supervision: Auto Execution Manipulation report is a tool designed to provide firms feedback on exceptions that were generated based on the firm’s order entry and trading activity in a given surveillance period. The report covers auto execution manipulation.  This report is produced on a monthly basis.

Summary Report

The table below provides a reference description for all of the elements found for Auto Execution Manipulation exceptions identified during the month.  

In general, a member firm’s office or location is either registered as a branch office, if it meets the definitions contained in Rule 3110(f), or exempt from branch office registration (i.e., an unregistered office or non-branch location), if it fits within an express exclusion from the branch office definition listed in Rule 3110(f)(2)(A)(i)–(vii) or is designated as a residential supervisory location (or RSL) under the terms of Rule 3110.19. 

General

1. Q: Why does FINRA publish the Sanction Guidelines?

A: FINRA publishes the Sanction Guidelines to familiarize member firms and associated persons with the disciplinary sanctions that could result from typical securities industry rule violations.

2. Q: Who develops the sanctions and fines?

Background

In response to the March 2017 Special Notice on Engagement issued as part of FINRA360, FINRA received a number of comments and suggestions regarding engagement in connection with FINRA's rulemaking process. After carefully reviewing and analyzing the comments, FINRA is taking a number of actions to address the comments and suggestions that it received.

Rulemaking Process

Questions and Answers on FINRA’s Eligibility Proceedings for Firms Participating in the Securities and Exchange Commission’s (“SEC” or “Commission”) Share Class Selection Disclosure Initiative (“SCSD Initiative”).