FINRA recently published its annual Examination and Risk Monitoring Program letter, which serves as a compliance guideline for firms. As part of this report, they’ve announced that their enforcement priorities for 2023 will include new areas of focus and priority.
In addition to their new areas of focus, which include fixed-income product pricing mistakes and policies that could allow manipulative trading to occur, FINRA will continue to fine-tune their focus and approach to addressing common broker issues. This will include the Regulation Best Interest compliance which came into full effect last year.
A big point of emphasis in the report and a top priority for FINRA will continue to be cybersecurity. With the rise of technology and the increasingly important role that it plays in all areas of an advisor’s business, FINRA expects firms to have cybersecurity programs and controls that are in line with their risk profile, business model, and scale of operation. Advisors can expect a strong focus on mobile apps and their disclosures and explanations of higher-risk products and services.
As the list of areas that FINRA is going to be focusing on broadens, it’s important for advisors to make a habit of checking in to be sure that their firms are staying compliant. FINRA’s yearly report, FINRA’s Examination and Risk Monitor Program, is a great place to gain key insights and observations to use in making sure you stay compliant.
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