More of an SRO – FINRA unveils its priorities for 2018

Abstract

Purpose

To explain FINRA’s priorities for 2018, as reflected in its Annual Regulatory and Examination Priorities Letter.

Design/methodology/approach

Evaluates the overall tone of FINRA’s letter as self-reflective, describes most of FINRA’s priorities for 2018 as unchanged from previous years, and highlights new areas of focus for FINRA.

Findings

FINRA plans a number of organizational improvements over the next year which could facilitate positive dialogue between firms and FINRA examiners, helping to reduce the burden on broker-dealers and possibly avoid low-level enforcement action. FINRA expressed a desire to better leverage its model as a self-regulatory organization to achieve its mission. Most of FINRA’s priorities for 2018 are old standbys, including fraud, high-risk firms and brokers, cybersecurity and AML programs, product suitability vetting, and best execution surveillance. FINRA’s new areas of focus for 2018 include business continuity plans, technology governance, cryptoassets, options violations, new report cards, and new rules.

Practical implications

Despite FINRA leadership’s commitment to self-analysis and enhanced communication, FINRA continues to be highly committed to examining and addressing through enforcement action potential failures to comply with its rules. Firms facing FINRA or SEC examinations should brush up on FINRA’s old standby priorities and fine-tune their practices to ensure compliance with industry trends.

Originality/value

Practical guidance from experienced securities and financial services lawyers that summarizes FINRA’s stated approach for 2018.

Citation

Nathan, D. and Popken, B. (2018), "More of an SRO – FINRA unveils its priorities for 2018", Journal of Investment Compliance, Vol. 19 No. 1, pp. 39-41. https://doi.org/10.1108/JOIC-02-2018-0009