FINRA will focus on supervision, liquidity, and firm culture in 2016. The Financial Industry Regulatory Authority (FINRA) announced the regulatory and enforcement issues it will focus on during 2016 in its 2016 Regulatory and Examination Priorities letter. Areas highlighted in the letter include supervision; risk management and controls; liquidity; firm culture; and conflicts of interest and ethics. (1/5/2016) FINRA press release.
FINRA report on Securities Helpline identifies best practices for firms to assist seniors in avoiding scams. FINRA released a year-end report on the FINRA Securities Helpline for that highlights examples of fraudulent schemes identified through calls to the Helpline and provides a set of effective practices for protecting seniors that firms should consider implementing. (12/30/2015) FINRA press release.
New MSRB rules on municipal advisor conduct will take effect in June. The Municipal Securities Rulemaking Board (MSRB) advised municipal advisors that, beginning in June 2016, they will be subject to new rules governing their professional conduct when advising state and local governments on municipal finance products and transactions. The MSRB will host an educational webinar on April 28, 2016, to assist municipal advisors in preparing for the implementation of the new rules. (12/24/2015) MSRB press release.
NYSE provides new email addresses for communicating with NYSE Regulation.The New York Stock Exchange, LLC (NYSE) published an Information Memo that provides updated email addresses for communicating with NYSE Regulation, which may be used beginning on January 4, 2016. (12/22/2015) NYSE Information Memo 15-31.
NYSE announces new examination requirement for proprietary traders. NYSE announced that, as of January 4, 2016, individuals engaged in proprietary trading on NYSE and NYSE MKT LLC will be required to pass the Securities Trader Qualification Examination (Series 57 Exam). (12/18/2015) NYSE Information Memo 15-12.
Brokerage firm failed to detect fraudulent scheme targeting senior citizens.FINRA announced sanctions against Fidelity Brokerage Services LLC for supervisory failures after it failed to detect a fraudulent scheme that resulted in the theft of more than US$1 million from several elderly customers. FINRA found that a former employee of another brokerage firm posed as a Fidelity broker and encouraged former customers to establish accounts at Fidelity, including several joint accounts that listed her as a joint owner and enabled her to convert assets to her own personal benefit. Fidelity failed to detect or pursue several indicators of the fraudulent scheme, including common identifiers linking the account to the fake broker, the pattern of money movement in the accounts, and telephone calls received by Fidelity’s customer-service call center related to the fraudulent scheme. Without admitting or denying the charges, Fidelity agreed to pay a US$500,000 fine and US$530,000 in restitution to settle the charges. (12/18/2015) FINRA press release.
FINRA’s Dispute Resolution Task Force issues recommendations. FINRA published the final report and recommendations of its Dispute Resolution Task Force, which was formed to recommend strategies to enhance the transparency, impartiality and efficiency of FINRA’s dispute resolution forum. (12/16/2015) FINRA press release.
FINRA study concludes corporate bond liquidity is healthy, but recognizes new risks. New research published by FINRA indicates liquidity in the US corporate-bond market is healthy based on data showing a record level of new bond issuances, growing transaction volumes, and rising trade numbers, but potential new risks are emerging related to changes in market structure. (12/10/2015) FINRA press release.
New forex reporting requirements begin in January. The National Futures Association (NFA) notified forex dealer members (FDMs) that, as of January 5, 2016, the NFA will require FDMs to include additional information in the daily Forex Financial Report and, as of January 31, 2016, NFA will require FDMs to include additional information in the supplementary section of the monthly 1-FR-FCM (or FOCUS II) filing. (12/9/2015) NFA Notice I-15-29.
NYSE drops reporting obligations regarding Futures Commission Merchants.The NYSE informed its members and member organizations that they are no longer obligated to update FINRA, NYSE or NYSE MKT LLC with a list of Futures Commission Merchants they use to execute agency and proprietary index futures. (12/8/2015) (12/8/2015) NYSE Information Memo 2015-9.
FINRA’s new clearing only, non-regulatory trade submission coming in February. FINRA provided notice of new rule amendments, effective February 1, 2016, introducing a new category of trade submissions that firms can use to submit to clearing those OTC transactions in equity securities that have not been previously reported through a FINRA facility. The new clearing only, non-regulatory reports can only be used by firms that have satisfied their regulatory reporting obligations through other submissions to FINRA. (12/8/2015) FINRA Regulatory Notice 15-51.