The Financial Industry Regulatory Authority issued its 2010 annual examination priorities letter to highlight new and existing areas of significance to FINRA’s regulatory program for the year. After describing a few key organizational developments, including the newly constituted Office of Fraud Detection and Market Intelligence and the new eFOCUS filing platform, the letter begins with a number of “Regulatory and Business Considerations” for firms, including, among others: direct market access/sponsored access, member private offerings, new FINRA financial and operational rules and liquidity issues. With respect to 2010 examinations, FINRA listed a vast array of priorities including: fraud detection, information barriers, variable annuities, protection of customer information and IT/Cyber-Security, anti-money laundering, pandemic preparedness/business continuity planning, branch office supervision, outsourcing, inventory and collateral valuation, customer margin debts collateralized by nonmarketable securities, accounting and spreadsheet controls, day-trading margin, fully paid lending programs, market regulation options examination program, short sales and Regulation SHO compliance, and algorithmic trading controls.

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