In its Risk Monitoring and Examination Priorities Letter (the "2020 Letter"), FINRA identified several areas of focus for 2020, including:
Sales Practice and Supervision. FINRA will assess firms' compliance with Regulation Best Interest ("Reg. BI") and Form CRS. In addition, FINRA will focus on (i) communications to retail investors regarding private placements, (ii) use of different electronic communication channels (e.g., texting and social media), (iii) cash management and bank sweep programs, (iv) sales of IPO shares and (v) trading authorizations.
Market Integrity. FINRA will monitor firms for compliance with current Order Audit Trail System ("OATS") requirements, and implementation of Consolidated Audit Trail ("CAT") reporting requirements. In addition, FINRA will address firms' compliance with (i) direct market access requirements under Exchange Act Rule 15c3-5, (ii) best execution requirements under FINRA Rule 5310, and (iii) the requirements of Rule 603 (the "Vendor Display Rule") and Rule 606 ("Disclosure of order routing information") of Regulation NMS.
Financial Management. FINRA will focus on (i) clearance and custody of digital asset transactions, (ii) liquidity management, (iii) compliance with net capital requirements in connection with underwriting commitments and (iv) the steps firms are taking to transition away from LIBOR.
Firm Operations. FINRA will focus on (i) cybersecurity, (ii) technology governance programs and (iii) supervisory controls relating to customer confirmation and AML requirements.
FINRA identified risk monitoring and examination priorities for 2019.
In an annual Regulatory and Examination Priorities Letter, FINRA identified major areas of focus for 2018.
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