The Financial Industry Regulatory Authority issued guidance regarding effective liquidity management at broker-dealers, including clearing firms and large introducing brokers. At the same time, FINRA said each broker-dealer “should review its liquidity condition under possible stress events and determine which liquidity management practices are best suited to its particular business.” Effective controls and practices identified by FINRA included ensuring management’s and staff’s understanding of issues that could reasonably be expected to arise in stress events; having appropriate governance to help anticipate and track cash outflows under stress scenarios and address a firm’s funding needs; having concrete plans to respond to severe stress events; implementing funding plans, including committed facilities (e.g., without restrictive covenants that are likely to make such facilities less available) to respond to severe stress situations; and having the capacity to perform daily computations to ensure firms can respond to customer requests to withdraw funds. Firms must know when to switch from business as usual to contingent funding mode, said FINRA.