FINRA Releases Exam Priorities List; Announces Risk Survey
FINRA has released its annual Regulatory and Examination Priorities letter, highlighting â€œareas of significanceâ€ for the examination and enforcement staffs. The comprehensive 16-page letter highlights 28 areas of focus where firms should assess whether they have sufficient internal controls, supervisory systems, and risk management practices. Among the highlights include suitability for retail customers (especially complex products), supervision of private securities transactions and outside business activities, information technology and security, outsourcing, social media and electronic communications, and pricing of hard-to-value securities. FINRA also indicates that firms will be receiving a Risk Control Assessment Survey to help FINRA â€œbetter understand firmsâ€™ business activities, product mix, customer base, and underlying controls.â€
OUR TAKE: The usefulness of a â€œpriorities listâ€ declines as the list grows to encompass most of the areas that FINRA regulates. However, the letter does help compliance officers build checklists for internal reviews and resource allocation.