FINRA's Susan Axelrod on Recent Developments in the Broker-Dealer Compliance Programs Focusing on Cyber Security

In a speech before the PLI Seminar on Broker-Dealer Regulation and Enforcement 2012, FINRA's Executive Vice President and head of Member Regulation Sales Practice, Susan Axelrod, discussed several product-specific concerns, sales practice issues, and supervisory issues in high-frequency trading. Cyber security was a particular focus of the talk. Broadly speaking, Axelrod addressed the following issues:

• The regulatory environment and challenges;
• Changes in FINRA's examination program;
• The SEC's adoption of Rule 613 and the need for a consolidated audit trail;
• Issues in cyber security;
• The evolution of complex products;
• FINRA's "Suitability Rule" (Rule 2111) and "Know Your Customer Rule" (Rule 2090); and
• The need for improvement by firms in assessing and disclosing conflicts of interest.

Axelrod further states that FINRA is reviewing its rules and is seeking to determine whether current rules remain relevant and, if not, whether they should be modified or repealed.

Click here to view speech in full (links externally to FINRA website).
Related news item with Cadwalader memo on cyber security link here.