Posts from August 2021.

On August 27, the Securities and Exchange Commission (“SEC”) issued a broad request for information and comments on “gamification” in financial-market user interfaces, including artificial intelligence and machine learning, among others.

As the Release explains:  The SEC requests input on

broker-dealer and investment adviser use of “digital engagement practices” or “DEPs”, including behavioral prompts, differential marketing, game-like features (commonly referred to as “gamification”), and other design elements or features designed to engage ...

Tags: SEC

The Financial Industry Regulatory Authority (“FINRA”) recently kicked off a “sweep” examination with its August 2021 Targeted Exam Letter on “practices and controls related to the opening of options accounts and related areas, including account supervision, communications and diligence.”  The exam covers both self-directed and rep-recommended retail accounts (not institutional or managed accounts) during January 1, 2020 through the present.

The sweep seeks:

  1. “Written Supervisory Procedures (WSP), compliance manuals and any other written guidance ...
Posted in: FINRA

On August 13, 2021, the Financial Industry Regulatory Authority (“FINRA”) issued Regulatory Notice 21-29, collecting guidance on outsourcing and vendor management.  The Notice was prompted by increased reliance on outsourcing (especially during COVID), some enforcement actions involving vendor-management issues, and similar proposed inter-agency guidance by banking regulators.

The Notice reminds firms that while they can outsource task or functions, they cannot outsource-away their regulatory compliance obligations.  In turn, that means the outsourcing process ...

Posted in: FINRA
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