Search Results: Regulatory Guidance

FINRA 2022 Exam Report Spotlight: Communications with the Public

It came as no surprise that FINRA’s 2022 Examination and Risk Monitoring Program Report highlighted communications with the public as a continued area of focus.  The primary theme across this focus area relates to the sufficiency of internal processes, procedures, and controls.  As FINRA has done with other areas, the…

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SEC and FINRA Spotlight Net Capital Requirements and Financial Management Practices

The SEC recently published its 2022 Examination Priorities Letter on the heels of FINRA issuing its 2022 Examination and Risk Monitoring Program Report.  One of many areas of common focus is financial management, and more specifically, net capital requirements and safekeeping of funds and securities.  The SEC, for example, reminded…

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SEC Staff Provides Guidance on Broker-Dealer and Investment Adviser Standards of Conduct for Account and Rollover Recommendations to Retail Investors

Our recent client alert discusses an SEC staff bulletin reiterating the standards of conduct applicable to broker-dealers and investment advisers when making account recommendations to retail investors. Broker-dealers are subject to Reg. BI. Investment advisers are subject to the fiduciary standard under the Advisers Act. The standards of conduct are…

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SEC Examinations Division Publishes 2022 Priorities

The SEC Division of Examinations recently published its list of priorities for 2022.  While it was a bit late compared to a typical year, the priorities letter provides a roadmap for firms to better understand where the Division will take its examination efforts over the coming months. Significant focus areas…

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Ding, Dong! The Dealer/Trader Distinction is Dead. HFTs and DEX AMMs Should Take Notice

The SEC recently proposed rules that would greatly expand the Exchange Act definition of “dealer” and essentially kill the existing dealer/trader distinction long-recognized by the SEC.  The likely outcome is that most proprietary trading firms will need to register with the SEC as dealers and become members of FINRA or…

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FINRA Reminds CCOs About Potential Supervisory Liability

FINRA recently published Regulatory Notice 22-10 reminding firms of the scope of Rule 3110 (Supervision) and the potential liability of Chief Compliance Officers for failure to reasonably discharge supervisory responsibilities delegated to them. FINRA recognizes that compliance and supervision are distinct roles that carry different obligations.  FINRA has said that…

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FINRA Reminds Firms of Evolving Definition of “Prompt” Order Execution

FINRA recently reminded firms of their obligation to execute marketable customer orders fully and promptly.  While this seems fairly routine, what’s notable about the reminder is that “prompt” doesn’t necessarily mean what it used to. FINRA Rule 5310 (Best Execution and Interpositioning) requires a firm to “make every effort to…

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