The AWC highlights the importance of having appropriate procedures in place to ensure that newly hired employees do not act in a capacity for which registration is required until after they are registered with FINRA through approval of a Uniform Application for Securities Industry Registration or Transfer (Form U4). Consistent with the AWC, these procedures may include reminders to unregistered individuals, and their supervisors, of their unregistered status, as well as an escalation process…
Firms that act as Qualified Independent Underwriters are required to comply with FINRA ("Public Offerings of Securities With Conflicts of Interest"). This includes the requirement, set forth at Rule 5121(a)(2), that the QIU "participate in the preparation" of the offering documents, while also exercising the usual due diligence standards. As set forth in FINRA Regulatory Notice 10-22, the obligation to participate in the preparation of the offering documents is accompanied by an…
Surveillance of potentially manipulative trading by customers is not always easy. Getting the surveillance parameters right requires judgement and can always be second guessed by FINRA.
In this enforcement matter, it appears the firms made things more difficult than they needed to. First, they failed to notice when, because of a coding error, systems stopped monitoring for wash trading in warrants. Anytime regulatory systems are changed, whether as a result of software or upgraded…
While requires fingerprinting with respect to "partners, directors, officers, or employees" of a broker-dealer, it is likely that the US securities regulators read the term "employees" broadly to include associated persons consistent with the broader definition of such term found elsewhere under the Securities Exchange Act—at least to the extent those persons are not exempted by the categories listed under Rule 17f-2(a)(1)(i).
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The AWC highlights the importance of having appropriate procedures in place to ensure that newly hired employees do not act in a capacity for which registration is required until after they are registered with FINRA through approval of a Uniform Application for Securities Industry Registration or Transfer (Form U4). Consistent with the AWC, these procedures may include reminders to unregistered individuals, and their supervisors, of their unregistered status, as well as an escalation process…
Firms that act as Qualified Independent Underwriters are required to comply with FINRA ("Public Offerings of Securities With Conflicts of Interest"). This includes the requirement, set forth at Rule 5121(a)(2), that the QIU "participate in the preparation" of the offering documents, while also exercising the usual due diligence standards. As set forth in FINRA Regulatory Notice 10-22, the obligation to participate in the preparation of the offering documents is accompanied by an…
Surveillance of potentially manipulative trading by customers is not always easy. Getting the surveillance parameters right requires judgement and can always be second guessed by FINRA.
In this enforcement matter, it appears the firms made things more difficult than they needed to. First, they failed to notice when, because of a coding error, systems stopped monitoring for wash trading in warrants. Anytime regulatory systems are changed, whether as a result of software or upgraded…
While requires fingerprinting with respect to "partners, directors, officers, or employees" of a broker-dealer, it is likely that the US securities regulators read the term "employees" broadly to include associated persons consistent with the broader definition of such term found elsewhere under the Securities Exchange Act—at least to the extent those persons are not exempted by the categories listed under Rule 17f-2(a)(1)(i).
Put another way, the regulators read the term "…