WASHINGTON--(BUSINESS WIRE)--FINRA published today its 2024 FINRA Annual Regulatory Oversight Report, formerly known as the Report on FINRA’s Examination and Risk Monitoring Program. The report provides member firms with key insights and observations from recent activities of FINRA’s regulatory operations to use in strengthening their compliance programs.
“The report’s findings from across FINRA’s Member Supervision, Market Regulation and Enforcement programs can serve as a valuable resource for member firms,” said Greg Ruppert, Executive Vice President, Member Supervision at FINRA. “As our industry evolves, so do the compliance challenges faced by firms, which is why the report is so critical. Some of the topics covered will be familiar from past reports, updated for 2024, while others are new and represent emerging risks and evolving trends that are of growing importance as we look ahead.”
New Topics Covered in the Report Include:
- Crypto Asset Developments. The report provides some considerations for firms that may want to account for crypto asset-related risks, as well as guidance for firms contemplating engaging in crypto asset-related activities.
- Advertised Volume. The report’s findings include inflating trade volume and unreasonable supervision.
Other Topics Include:
- Cybersecurity. FINRA has observed an increase in the variety, frequency and sophistication of certain cybersecurity incidents, including the establishment of imposter websites, insider threats, ransomware and cybersecurity events at critical vendors. FINRA has provided guidance to firms related to identifying, preventing and mitigating incidents through its Cybersecurity Topic Page and its new Industry Risks and Threats Resource page, which include guidance concerning particularly significant ongoing and emerging threats to firms and investors.
- Anti-Money Laundering (AML), Fraud and Sanctions. FINRA member firms are required to develop and implement a written AML program that is approved in writing by senior management and is reasonably designed to achieve and monitor the firm’s compliance with the Bank Secrecy Act and its implementing regulations. Related considerations in the report include the scope of an AML program, suspicious activity reporting and customer onboarding.
- Reg BI and Form CRS. FINRA has been examining firms’ implementation of Reg BI and Form CRS obligations throughout 2021-2023 and shares additional related considerations for member firms to review.
- Consolidated Audit Trail (CAT). FINRA continues to evaluate member firms that receive or originate orders in National Market System stocks, OTC equity securities and listed options for compliance with CAT Rules.
For each of the 26 topics covered, the report identifies the relevant rule(s) involved, highlights key considerations for firms’ compliance programs, summarizes noteworthy findings or observations from recent oversight activities, outlines effective practices that FINRA observed and provides additional resources that may be helpful to firms in reviewing their supervisory procedures and controls and fulfilling their compliance obligations.
A podcast about the report—featuring Ornella Bergeron, Senior Vice President, Member Supervision; Omer Meisel, Executive Vice President, Head of National Cause and Financial Crimes Detection Program; Michael Solomon, Senior Vice President, Examinations; and Claire O’Sullivan, Vice President, Regulatory Advisor and Stakeholder Engagement—is available on FINRA’s website. In addition, the subjects covered in the report will be featured in other FINRA-related compliance and education resources released throughout the year, including at the 2024 FINRA Annual Conference taking place May 14-16, 2024, in Washington, D.C.
About FINRA
FINRA is a not-for-profit organization 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 U.S. 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.
