This year, FINRA announced its intent to focus on key sales practices, as well as financial, operational and market integrity matters. In particular, the Authority highlighted an issue it says cuts across all of its regulatory programs. This is the increase in what it calls “some” firms’ repeated failure to provide timely responses to FINRA’s information requests made in connection with examinations and investigations.
Is that you?
FINRA wants you to do a better job
The regulators find these failures to respond in a timely fashion particularly troubling as, from FINRA’s perspective, it believes it thoroughly discusses large and complex information requests with the firms it audits and is flexible with respect to due dates, rolling productions, scope and format—as long as the integrity of the regulatory matter is not compromised.
According to FINRA’s annual letter, “These situations are not acceptable, as timely productions of information (as well as oral information through interviews and on-the-record testimony) are critical to FINRA achieving its investor protection and market integrity mission by identifying and shutting down bad practices and bad actors at the earliest possible time. FINRA…cautions…that production failures expose firms to disciplinary action.”
FINRA wants to protect investors and ensure your integrity
So if you do not give the regulators what they want, when they want it. If you ignore requests or put off responding, you risk provoking FINRA’s ire. And no one in their right mind wants to deal with an angry regulator.
The moral of the story:
Give FINRA what it wants when it wants it. All of which simply underscores the importance of records retention and records retrieval. Be prepared to access the records you need and deliver it all on demand to the examiners in a timely fashion. Put processes and procedures in place now.
You can do it yourself. Or, you can connect with an independent regulatory archival and compliance solutions specialist like us. Patrina. Ask about our comprehensive regulatory archival and compliance solutions specifically designed for Broker/Dealers, RIAs, and FCMs. Or…you can just bury your head in the sand and hope that FINRA forgets about you…
Let’s talk (212- 233-1155).