- Each year, FINRA publishes its Annual Regulatory and Examination Priorities Letter to highlight issues of importance to FINRA's regulatory programs
- Most of the topics addressed in this year’s letter have been highlighted in prior years, but specific areas of emphasis have been updated or modified
- "Starting this year, we will publish a summary report that outlines key findings from examinations in selected areas"
Each year, FINRA publishes its Annual Regulatory and Examination Priorities Letter to highlight issues of importance to FINRA's regulatory programs. In this year´s letter, Robert W. Cook, President and CEO, provides information about areas FINRA plans to review in its 2017 exams based on observations from its regulatory programs as well as input from various stakeholders, including member firms, other regulators and investor advocates.
Robert W. Cook, says: “As you will see, a common thread running throughout the Priorities Letter is a focus on core “blocking and tackling” issues of compliance, supervision and risk management. Most of the topics addressed in this year’s letter have been highlighted in prior years, but specific areas of emphasis have been updated or modified based on recent observations and experience. Attention to the core regulatory requirements identified in the letter—and how to address them in light of new business challenges and market developments—will serve investors and markets well.
“Your ongoing input on existing and emerging issues that put investors and market integrity at risk is very important. We share a common goal of promoting investor confidence, and I ask that you let us know of any areas on which you think FINRA should focus its regulatory resources to protect investors and bolster market integrity.
“Since joining FINRA in August, I have been engaged in an ongoing “listening tour,” meeting with member firms, regulators and investor groups, among others. I am grateful for the feedback and time many people have given me. In the coming months, I plan to provide more information about some concrete steps we are planning—based on the listening tour, as well as other input—to take a fresh look at certain aspects of FINRA’s programs and operations and to identify opportunities to do our work more effectively. In the meantime, I want to share with you two more modest steps we are already planning to take.
“First, I have heard frequently from firms and other FINRA stakeholders that it would be useful to learn more about what FINRA is seeing through its examination programs. They have suggested that publishing common examination findings would help inform firms of deficiencies FINRA has observed, including in its areas of priority, and allow firms that have not yet been examined to fix any similar deficiencies. I agree, and starting this year, we will publish a summary report that outlines key findings from examinations in selected areas. This document will alert firms to what we are seeing from a national perspective and, therefore, serve as an additional tool firms can use to strengthen the control environment for their business.
“Another suggestion that emerged from my meetings is that many small firms would like us to explore how FINRA can provide more, and perhaps different, compliance tools and resources to assist them in complying with applicable regulatory requirements. I have already asked our staff to develop several new resources along these lines, and in 2017 we will introduce a “compliance calendar” and a directory of compliance service providers. In addition, to gather more information in this area, we recently sent a brief survey to small firms to help us learn about the compliance tools and resources they would find valuable. We have received very helpful input from firms to date, but it is not too late to participate. If you are a small firm and have not already completed the survey, please do so to help us better assist you.
“A related area of focus in the coming year will be recognizing the vital role that small firms—as well as larger firms—play in facilitating capital formation by small and emerging growth companies, which are vital engines of our economy and of job creation. We will be looking for opportunities to support these activities, including by providing guidance where appropriate to encourage innovative business models and new technologies in the Fintech space, consistent with maintaining important investor protections.
“Some have asked me when my listening tour will be finished. The short answer is: never. As noted above, in the coming months I will share with you some additional steps we will be undertaking that have been informed by the listening tour, and I am very excited about moving forward with these initiatives. But the listening will not end during my tenure. I hope you will always feel free to reach out directly to me or to anyone on our staff with your ideas and suggestions on how FINRA can better execute its mission of investor protection and market integrity.”
You may see the document that follow the letter here.