Quadrant Regulatory Group

02/09/2022

Check out the 2022 FINRA Examinations and Risk Monitoring Report.

Introduction The 2022 Report on FINRA’s Examination and Risk Monitoring Program (the Report) provides firms with information that may help inform their compliance programs.

07/23/2021

Effective October 1, 2021, FINRA members will be required to file retail communications that promote or recommend a private placement offering subject to FINRA Rules 5122 and 5123, in addition to the currently required PPMs, term sheets, and other offering documents. Examples of these retail communications include web pages, slide presentations, pitch decks, one-page “teasers,” fact sheets, sales brochures, executive summaries, and investor packets. Members must file the offering documents and retail communications via FINRA’s Private Placement Filing System in Firm Gateway. FINRA expects that members will file most retail communications with Corp Fin at the same time they file their PPMs, term sheets, and other offering documents.

The new requirements are set forth in Regulatory Notice 21-26.

https://www.finra.org/rules-guidance/notices/21-26

05/20/2021

An increase in customer account takeover (ATO) incidents has been recently noted by FINRA. Broker-dealers that allow online account opening and trading should read through Regulatory Notice 20-18. FINRA cites multiple industry practices that can be incorporated to reduce the risk of ATOs. These practices include:
- Verifying Customers’ Identities When Establishing Online Accounts
- Authenticating Customers’ Identities During Login Attempts
- Back-End Monitoring and Controls
- Procedures for Potential or Reported Customer ATOs
- Automated Threat Detection
- Procedures for Restoring Customer Account Access

For detail of the best practices noted and additional information regarding ATOs, please refer to RN 20-18.

Summary FINRA has received an increasing number of reports regarding customer account takeover (ATO) incidents, which involve bad actors using compromised customer information, such as login credentials (i.e., username and password), to gain unauthorized entry to customers’ online brokerage accoun...

04/19/2021

FINRA recently issued Regulatory Notice 21-15 reminding firms of the responsibility to determine whether options trading is appropriate for customers even if the account is self-directed. Firms must perform reasonable due diligence and collect essential facts before approving options trading. The full notice is available below.

03/03/2021

It has come to our attention that scammers are sending emails to broker-dealers pretending to be from SIPC. The email address used is .org which is meant to appear legitimate. Do not open any attachments or provide any information.

As with any suspected phishing email, if in doubt, call the sender to confirm.

02/19/2021

SEC Grants FINRA Request for 30-Day Filing Extension for Smaller Broker-Dealers

https://www.finra.org/rules-guidance/notices/21-05

11/17/2020

The 2021 Broker-Dealer renewals program began on November 17, 2020. Be sure to review the available reports in the FINRA Gateway to ensure your firm, branches, and associated persons are properly registered.

Summary The 2021 Renewal Program begins on November 16, 2020, when FINRA makes the Preliminary Statements available to all firms in E-Bill. Preliminary Statements are not mailed to firms. Firms should note the following key dates in the renewal process: October 19, 2020 Firms may begin submitting po...

11/05/2020

The amendments will be effective 60 days after publication in the Federal Register, except for the extension of the temporary Regulation Crowdfunding provisions, which will be effective upon publication in the Federal Register.

Press Release SEC Harmonizes and Improves “Patchwork” Exempt Offering Framework Rule amendments harmonize registration exemptions, eliminating complexity and facilitating access to capital and investment while preserving or enhancing important investor protections FOR IMMEDIATE RELEASE 2020-273 ...

02/25/2020

Summary FINRA issued Regulatory Notice 20-06 updating the text of the Securities Exchange Act (SEA) financial responsibility rules in the Interpretat

12/31/2019

A Happy and Healthy New Year to All.