FINRA Podcast on Firm Element Training Recaps Rule Updates

In the final episode of its podcast series titled "Fall 2015 Firm Element Advisory," FINRA covered new and updated items concerning firm element training plans.

Specifically, the FINRA podcast reviewed the following topics:

• Public Offerings. FINRA issued guidance about its filing requirements and review procedures for Regulation A+ offerings that qualify for exemption from registration under Regulation A amendments. The amendments concern exemptions for offerings of up to $50 million in securities during a 12-month period. FINRA also reminded firms that certain other rules, such as those on suitability and communications, apply to these transactions.

• Advisory Items Related to Registration. FINRA amended its rules to provide for the web-based delivery of Regulatory Element Continuing Education requirements. FINRA also continued its periodic qualification examination review and update and restructured the Series 4 exam for registered options principals.

• Sanctions Guidelines. The National Adjudicatory Council revised its sanctions guidelines on misrepresentations and suitability to advise adjudicators to bar firm employees who commit intentional or reckless fraud or whose misconduct is predominated by aggravating factors. It also made changes to emphasize that sanctions should protect the investing public by deterring misconduct and upholding high business-conduct standards.

• Trading Practices and Supervision. The SEC issued an order approving the national market system plan that implements a tick-size pilot program for two years starting on May 6, 2016. The pilot program is a joint effort by FINRA and the National Securities Exchanges to create a data-driven test that evaluates whether widening the tick size for the securities of smaller capitalization companies will impact on trading, liquidity or the markets.

• Transaction Reporting and Data Dissemination. The SEC approved amendments to the Trade Reporting and Compliance Engine rules that will permit FINRA to add a new contra-party type for firms to use in order to identify transactions with non-member affiliates. These amendments will become effective November 2, 2016. FINRA also issued guidance on effective supervision and control practices for firms engaging in algorithmic trading strategies (see FINRA Notice 1509).