
With Apologies to George Carlin
George Carlin was one of the best. Not only did he help Alex Winter and Keanu Reeves save the world, but also put together the authority on what makes baseball different from football. (“Baseball begins in the spring, the season of new life. Football begins in the fall, when everything’s dying.”) He also memorialized his –...
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Is The Past Prologue? FINRA Permits Remote Inspections . . . For Now
On July 1, FINRA amended Rule 3110.17 to allow broker-dealers to remotely inspect offices of supervisory jurisdiction (OSJs), branch offices and non-branch locations through the end of 2022. The substantive requirements remain unchanged. A broker-dealer must: (1) have procedures for...
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Not Quite the “Wild West”
Last week Congress received a bill that would grant the Commodity Futures Trading Commission, not the Securities and Exchange Commission, jurisdiction over the growing digital assets market. The goal is to, as CNBC put it, tame the “’Wild West’ crypto...
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FINRA’s Expectations (Reg Notice 22-11)
FINRA issued Regulatory Notice 22-11 in April to remind broker-dealers of their obligations in the sale of alternative mutual funds to their clients. FINRA explained that it published this guidance because of a number of recent enforcement actions it took against firms selling this product. However, upon closer inspection, 22-11 is simply FINRA’s...
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EXAMS’ Risk Alert on Advisers Act Section 204A and the Code of Ethics Rule
The SEC’s Division of Examinations (“EXAMS”) posted its observations concerning registered investment advisers’ compliance with Section 204A of the Investment Advisers Act of 1940 and Rule 204A-1 (also known as the “Code of Ethics Rule”) in...
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Reporting to the Consolidated Audit Trail (CAT)
MENOs and MEORs and MEOFs, Oh My! – A High-Level Overview of CAT Reporting
The Consolidated Audit Trail (CAT) is the biggest change – and many would offer, challenge – to regulatory reporting in the broker-dealer industry in some time. Perhaps ever. Accurate reporting requires a blend of regulatory expertise and technical skill...
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FINRA’s March Disciplinary Actions
Industry participants know that FINRA’s monthly posting of its "Disciplinary and Other FINRA Actions" offers insight into its enforcement priorities. One can also say it offers various teaching moments. The March edition is no exception.
Of interest to me was a Letter of Acceptance, Waiver and Consent (AWC) that FINRA accepted from a broker-dealer to...
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Social Media Hygiene and Recordkeeping
Reporter Dalvin Brown advised that “deleting old social-media posts is good hygiene, no matter who you are.” See The Wall Street Journal, How to Delete Your Old Posts on Instagram, Facebook and Twitter (posted February 20, 2022). Agreed. Posting to social media can lead to unintended, and sometimes severe, consequences. However, industry practitioners are reminded...
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So, You Want To Be a CCO?
In Regulatory Notice 22-10, FINRA offers the broker-dealer community guidance on when it will consider charging a Chief Compliance Officer under Rule 3110. Equally as important, FINRA articulates the factors that it may consider when deciding not to level such a charge. The clarity is helpful. And worth any CCO’s careful examination.
FINRA...
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Did FINRA Just Preview its 2023 Report?
In Regulatory Notice 22-08, FINRA reminds its membership of their obligations when selling certain products and invites comment on whether the current regulatory framework is sufficient given today's practices. Industry members should also note that at page 9 FINRA offers a few observations stemming from its current targeted exam of options accounts and...
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