FINRA's 2017 Regulatory & Exam Priorities

On January 4, new President and CEO Richard Cook issued FINRA's Annual Regulatory and Examination Priorities Letter. This year's list in summary is:

New for 2017:

Targeted electronic off-site reviews "on select firms not scheduled for cycle exams."
An annual summary report of key exam findings on selected issues
More resources for small firms, including:
- Compliance calendar;
- Compliance service provide directory.

High-Risk / Recidivist Brokers

Dedicated exam group
Supervisory procedures and due-diligence
Branch inspections

Sales Practices

Seniors: fraud and abuse; complex products; microcap pump-and-dump
Suitability & Concentration: interest-rate risk; ETPs, non-traded REITs
Churning Long-term Products: mutual funds, UITs, Vas
OBA & Private Securities Transactions
Social Media & ESI Retention / Supervision

Financial Risks

Liquidity Risk: firms' liquidity risk management plans (Reg. Notice 15-33).
Financial Risk Management
Credit Risk: Rule 4210 - margin on covered agency trades

Operational Risks

Cybersecurity: risk mitigation programs, especially branch office controls and WORM document retention
Supervisory Controls Testing
Customer Protection and Asset Segregation
Reg. SHO: good locate and closing out fails
AML: automated process deficiencies; dedicated surveillance
MA Registration: proper registration and examination

Market Integrity

Manipulation: Big data to detect layering and spoofing
Best Execution: Reg. Notice 15-46
Audit Trail Reporting: responding promptly to early remediation reports
Tick Size Pilot
Market Access Rule compliance
Trading Exams: alternative trading systems disclosures
Fixed Income surveillance

The letter is here.


Thomas K. Potter, III ( is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas and Louisiana. He has over 30 years' experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile.

© 2017 by Thomas K. Potter, III (all rights reserved).

Posted in: FINRA
Jump to Page
Arrow icon Top

Contact Us

We use cookies to improve your website experience, provide additional security, and remember you when you return to the website. This website does not respond to "Do Not Track" signals. By clicking "Accept," you agree to our use of cookies. To learn more about how we use cookies, please see our Privacy Policy.

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. These cookies may only be disabled by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.