FINRA Releases Regulatory and Examination Priorities List
FINRA has released its annual list of Examination Priorities. FINRA explains that the list includes topics
of “heightened importance” and that firms should use the list to “refine their
compliance, supervisory and ethics programs.”
The list is quite and extensive and includes the following: (i) fraud
detection especially through affiliated and third-party firms; (ii)
surveillance of customer-initiated schemes; (iii) high frequency and
algorithmic trading; (iv) short sale locates; (v) information barriers to
prevent misuse of customer trading information and material non-public
information; (vi) due diligence of private placements; (vii) suitability when
recommending high-yield investments especially to senior investors; (viii)
municipal securities; (ix) structured and asset-backed securities; (x)
marketing of ETF; and (xi) use of social media.
OUR TAKE: FINRA uses this list as fair warning for upcoming exams. The list has greatly expanded over the years,
expressing FINRA’s increased regulatory and enforcement goals.