FINRA recently announced that it will be conducting an inquiry into unit investment trust (“UIT”) rollovers. UITs generally are unmanaged registered investment companies that are comprised of a fixed portfolio of securities and have fixed life spans. At the end of a UIT’s term, and instead of taking all or a portion of their money outright, investors are often offered the option of rolling all or a portion of their money into a new UIT created by the sponsor. This “rollover” option is often available at a reduced sales charge.
As part of its inquiry of UIT rollovers, FINRA will be requesting certain documents and information from firms, including Written Supervisory Procedures, which are enumerated in the targeted examination letter. The review period is from January 1, 2014 through June 30, 2016.