Published on Jan 18th, 2023 |

4 Important Topics from FINRA’s 2023 Risk Monitoring Report

News & Alerts

Brief Introduction

On January 10thFINRA published a report for 2023 to help firms strengthen their compliance programs.

The report covered twenty-four topics, with new topics including manipulative trading, fixed income/fair pricing, fractional shares, and regulation SHO.

We will discuss four topics that will have a significant impact on the compliance operations for 2023.

Who Is This Applicable To?

Who Is This Applicable To?

  • FINRA Registered Broker Dealers

4 Key Topics Covered in the Report

4 Key Topics Covered In The Report

  1. Cybersecurity
    • Firms should be aware of ongoing cybersecurity threats and create policies and procedures to adjust to and mitigate the risk of these threats.
    • FINRA has established a Cyber and Analytics Unit to assist member firms in proactively protecting their clients’ information.
  2. Complex Products
    • Firms offering complex products to customers will have FINRA attention related to their communications and disclosures.
    • Complex products sold to retail customers will have increased scrutiny as customer account activity may be assessed for true best interest of the client based off their investment profile.
  3. Regulation Best Interest and Form CRS
    • The risk report has been updated with the outcomes of FINRA’s review of other firms’ REG BI and Form CRS.
    • Important focus for these reviews included:
      • Addressing conflicts of interest
      • Adequate written supervisory procedures with proper implementation
      • Filing, delivering, and tracking accurate Form CRS
  4. Mobile Apps
    • Apps must be able to distinguish products and services of BD employees and those of affiliates or third parties.
    • Apps used for communication must have proper filing.
    • Mobile apps must have proper disclosures and explanations of the risks of their products.

Vigilant's Final Conclusion

Vigilant’s Final Conclusion

FINRA’s risk monitoring report provides significant insight into the compliance requirements of firms as the industry sees a rapidly increasing regulatory environment overall.

In order to have a successful compliance program that minimizes the risk of regulatory financial burden, firms must have a dynamic and proactive compliance culture that can adjust quickly to changing regulations.

Vigilant brings decades of compliance experience to the table when evaluating your compliance needs and customizing compliance support to meet your business needs.

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