FINRA Releases 2018 Regulatory and Exam Priorities

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WASHINGTON — The Financial Industry Regulatory Authority (FINRA) today released its 2018 Regulatory and Examination Priorities Letter, highlighting topics that FINRA will focus on in the coming year, including new and ongoing areas of focus. 

The Priorities Letter – alongside FINRA’s 2017 Examination Findings Report – serves as a resource for broker-dealers to enhance their compliance, supervisory and risk management programs and to prepare for their FINRA examination. Among the topics identified in the letter as areas of focus in 2018 are fraud, high-risk firms and brokers, operational and financial risks – including technology governance and cybersecurity – and market regulation.

Other areas of priority in 2018 include: 

  • sales practice risks, including recommendations of complex products to unsophisticated, vulnerable investors;
  • protection of customer assets and the accuracy of firms’ financial data; and
  • market integrity, including best execution, manipulation across markets and products, and fixed income data integrity.

FINRA will update its view on risks throughout the year, as well as provide observations on both concerns and effective practices relevant to some of these areas.

“The coming year will bring both continuity and change in FINRA’s programs,” FINRA CEO Robert Cook wrote in a note to firms that accompanied the Priorities Letter. “The continuity comes, first and foremost, in our unwavering commitment to our mission: protecting investors and promoting market integrity in a manner that facilitates vibrant capital markets. Change will come in how we accomplish that mission.” Mr. Cook further noted that FINRA has already made a number of significant enhancements to its operations through the ongoing FINRA360 organizational improvement initiative, and will continue to implement more changes in the coming year.

About FINRA

FINRA is dedicated to investor protection and market integrity. It regulates one critical part of the securities industry – brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.

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