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FINRA’s annual report gives a clear indication of topics it intends to scrutinize in examinations this year. These include areas such as AML audits and compliance risk assessments as usual, but also introduces some new concerns.
At around the same time each year, FINRA issues its regulatory priorities letter outlining the key items which will be addressed during its annual examinations of FINRA member broker-dealers.
This year’s report: 2022 Report on FINRA’s Examination and Risk Monitoring Program, runs to 60 pages and provides coverage of twenty-one different topics related to FINRA broker-dealers’ core compliance responsibilities.
New topics include:
- Firm Short Positions and Fails-to-Receive in Municipal Securities
- Trusted contact persons
- Funding portals and crowdfunding offerings
- Disclosure of routing information
- Portfolio margin and intraday trading.
Each topic outlines and identifies the relevant rule and risks addressed, key considerations for compliance programs, and noteworthy findings from recent examinations.
The report also outlines effective practices that FINRA observed during recent examinations and provides resources that member firms will find helpful when reviewing their policies and procedures to fulfill their compliance directives.
The report is intended to be an up-to-date resource for FINRA member firms to prepare for their upcoming FINRA examination, outlining those areas which FINRA deems as a priority.
Some additional areas of focus, as expected and outlined in previous years include: problems with some mobile apps and communications with customers/firm supervision of activity on those apps, the increasing number and sophistication of cybersecurity threats, and anti-money laundering best practices.
Find out more at our webinar
We will be looking at the FINRA 2022 Annual Report in more detail at our webinar on March 14th where we’ll talk through some practical actions you can take to prepare for this year’s examination.
How we can help
We regularly help FINRA member broker-dealers through their yearly examination process to mitigate regulatory risk before, during, and after a FINRA examination.
We conduct annual independent 3120 supervisory controls testing and annual independent AML compliance testing for numerous FINRA broker-dealers to regularly update and review compliance programs for the latest developments as outlined in the recently published report.
We also assists firms during their FINRA examination, to best respond and remediate any identified risk.
We host a quarterly AML roundtable for FINRA member broker dealers to share and discuss current challenges. Get in touch if you’re interested in joining our group.
