This AWC provides an interesting analysis of a member firm's reliance on so-called "activity letters" to allow continued trading in an active account. Specifically, in response to indications of excessive trading, the firm's compliance staff would send letters to affected clients stating that the firm had recently reviewed the customer's account and noted the account had been actively traded and asking the client to indicate whether the client was in agreement with the activity by signing…
The calculation of mark-ups and mark-downs on bonds under FINRA and MSRB rules can be complicated and often requires the exercise of judgment.
Specifically, FINRA Rule 2121 (and MSRB Rule G-30(a)) requires member firms to buy from customers or sell to customers at a price that is fair. For this purpose, fairness is to be determined by "taking into consideration all relevant circumstances ... with respect to [the relevant] security at the time of the transaction..." FINRA Rule 2121…
The Remote Inspections Pilot Program participation rates released by FINRA actually suggest that many member firms that could benefit from the Pilot Program have chosen not to participate, at least in the pilot's first year. Possible reasons include a reluctance to undertake the required risk assessment or to prepare written supervisory procedures governing the conduct of remote inspections. In addition, firms may also be concerned about the requirement to report aggregate findings as well…
Procedures covering how a firm and its associated persons are required to comply with regulatory requirements and how this compliance will be monitored and overseen are at the heart of any firm's compliance and supervisory program. Procedures should be sufficiently detailed such that it is clear who is subject to the procedures; when such requirements apply; what is required to be done; and how such compliance is documented.
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This AWC provides an interesting analysis of a member firm's reliance on so-called "activity letters" to allow continued trading in an active account. Specifically, in response to indications of excessive trading, the firm's compliance staff would send letters to affected clients stating that the firm had recently reviewed the customer's account and noted the account had been actively traded and asking the client to indicate whether the client was in agreement with the activity by signing…
The calculation of mark-ups and mark-downs on bonds under FINRA and MSRB rules can be complicated and often requires the exercise of judgment.
Specifically, FINRA Rule 2121 (and MSRB Rule G-30(a)) requires member firms to buy from customers or sell to customers at a price that is fair. For this purpose, fairness is to be determined by "taking into consideration all relevant circumstances ... with respect to [the relevant] security at the time of the transaction..." FINRA Rule 2121…
The Remote Inspections Pilot Program participation rates released by FINRA actually suggest that many member firms that could benefit from the Pilot Program have chosen not to participate, at least in the pilot's first year. Possible reasons include a reluctance to undertake the required risk assessment or to prepare written supervisory procedures governing the conduct of remote inspections. In addition, firms may also be concerned about the requirement to report aggregate findings as well…
Procedures covering how a firm and its associated persons are required to comply with regulatory requirements and how this compliance will be monitored and overseen are at the heart of any firm's compliance and supervisory program. Procedures should be sufficiently detailed such that it is clear who is subject to the procedures; when such requirements apply; what is required to be done; and how such compliance is documented.