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FINRA Releases New Guidance on Credit for Extraordinary Cooperation

July 17, 2019
Volume 29


  • Trade Reporting Notice
  • UPC Advisory
disciplinary actions

Disciplinary Actions


Upcoming Deadlines and Effective Dates
  • FINRA Request for Comment
  • SEC Requests for Comment

Education and Compliance Programs

FINRA reminds firms to register for CAT reporting.
FINRA issued Regulatory Notice 19-19 to remind firms they must register with FINRA CAT, LLC for reporting to the Consolidated Audit Trail (CAT). Initial CAT registration ran through June 27, 2019. FINRA urges any member firm with a CAT reporting obligation that has not yet registered to do so as soon as possible so the necessary entitlements for CAT reporting can be established in time for testing, which is scheduled to commence in December 2019.

All questions regarding CAT registration should be directed to the FINRA CAT Helpdesk at (888) 696-3348 or [email protected].


FINRA’s Board of Governors meets this week. In lieu of the standard FINRA Board meeting—which typically includes a full schedule of committee meetings and a review of rule proposals—this meeting will instead revolve around a series of strategic planning discussions. Select topics include the SEC's Regulation Best Interest, our long-term financial planning, and challenges facing small firms.

FINRA releases new guidance regarding credit for extraordinary cooperation in investigations. The Regulatory Notice supplements prior FINRA guidance, providing additional information about “extraordinary cooperation” respondents can provide to substantially assist FINRA in meeting its goals of investor protection and market integrity. To recognize and incentivize firms and individuals to take proactive and voluntary steps beyond those required under FINRA rules, FINRA Enforcement credits extraordinary cooperation so that the outcome of the matter is materially different than it would have been absent the respondent’s extraordinary conduct. For more information, refer to the following resources:


Trade Reporting Requirements Applicable to Step-Out Submissions

FINRA issued Trade Reporting Notice 7/16/19 to remind firms of their obligations when submitting step-outs to FINRA. While step-out submissions are voluntary and not required by rule, if firms elect to use a FINRA equity trade reporting facility to step out of a previously reported trade, they must comply with applicable trade reporting requirements.

FINRA Guidance on Private Placement and Public Offering Filings

FINRA’s Corporate Financing Department has assembled reference guides to address frequently asked questions about private placement filings and the review process for public offerings.

UPC Advisory

The following UPC Advisory was posted in the past week:

  • UPC #24-19 Vanguard Natural Resources, Inc. (VNRRQ)
 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:

  • FINRA announced that it has reached settlements with 56 member firms and obtained a total of $89 million in restitution for nearly 110,000 charitable and retirement accounts as a result of its mutual fund fee waiver initiative. All of the firms, including the two firms who agreed to settlements today, failed to waive mutual fund sales charges for the eligible accounts and failed to reasonably supervise the sale of mutual funds offering sales charge waivers.
  • July 2019 Disciplinary Actions

 Upcoming Deadlines and Effective Dates

FINRA Request for Comment

FINRA has issued Regulatory Notice 19-22 to request comment on a proposal to expand the alternative trading system (ATS) volume data that it publishes on its website to include information on transactions in corporate bonds and agency debt securities that occur within an ATS and are reported to FINRA’s Trade Reporting and Compliance Engine (TRACE). Comments are due September 7, 2019.

SEC Requests for Comment on FINRA Rules

The SEC requests comment on FINRA’s proposal to amend FINRA Rules 2210 (Communications with the Public) and 2241 (Research Analysts and Research Reports) to conform to the requirements of the Fair Access to Investment Research Act of 2017 (FAIR Act). The comment period expires July 29, 2019. See the Federal Register notice.

The SEC requests comment on FINRA’s proposal to amend FINRA Rules 6110 and 6610 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) and (2) publishing aggregate non-ATS volume for all firms, by eliminating the existing de minimis exception. The comment period expires August 1, 2019. See the Federal Register notice.


 Education and Compliance Programs

Free on-demand recordings of sessions from FINRA's 2019 Annual Conference are now available to member firms and CRCP graduates.

Register today for the 2019 Institutional Conference on September 11 in New York. The event will bring together industry experts, executives and policymakers to discuss topics affecting institutional firms across the country. Download the agenda.

FINRA is hosting several upcoming Half-Day Compliance Boot Camps, AML Half-Day Seminars and Cybersecurity Half-Day Seminars across the country.

Half-Day Compliance Boot Camps

  • August 8, 2019 | Del Mar, CA
  • September 17, 2019 | Minneapolis, MN
  • September 17, 2019 | Baltimore, MD
  • September 25, 2019 | Stamford, CT

AML Half-Day Seminar

  • September 19, 2019 | Chicago, IL

Cybersecurity Half-Day Seminars

  • August 27, 2019 | Costa Mesa, CA
  • September 26, 2019 | Boca Raton, FL

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. Upcoming events will be held in the Los Angeles, Woodbridge and Atlanta District Offices.

Review the compliance calendar to see a complete list of events.

The agenda for the 2019 Small Firm Conference is now available. This two-day event, which takes place on October 23–24 in Santa Monica, California, brings together FINRA staff and industry peers for in-depth discussions on small firms' practices. Register today to hear from FINRA leaders, including CEO Robert Cook and Executive Vice President of Member Supervision Bari Havlik.

Also coming up:

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