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Report on FINRA Examination Findings

Dec 12, 2018 12:33:30 PM

By Dermot Harriss

Following on the heels of the SEC (November 2) and CFTC (Nov 8), Finra has posted its annual report on enforcement: https://lnkd.in/dF-jE4asolutions pic

Highlights include: continued challenges with supervisory systems - i.e. automation to keep 'boiler room' advisors under control, and associated activities like excessive trading, over-concentration, unsuitable recommendations (Gotta LOVE this penny stock, baby - I tell you, my brother runs it, so I should know - I'll do you a favor: you're ALL IN!!), putting pensioner's money into 3 x VIX derivs, etc. Over and over: "Insufficient systems and controls".

AML was another theme, esp. lack of documentation of investigations (that's lack of appropriate systems, again). Liquidity risk, 15c35, market access controls came up - they often do. And Best Ex. It's astonishing that in the US, which has the oldest best ex rule set, brokers are still getting dinged for "No execution quality assessment" and "No review of certain order types" and "No evaluation of required factors".

 See OneMarketData for proven and cost-effective solutions for trade practice surveillance and Best Ex

 Dermot Harriss is responsible for delivering solutions that help firms meet their regulatory compliance needs. Dermot brings over twenty years of financial industry experience from roles at Goldman Sachs, Morgan Stanley, and D.E. Shaw that included futures trading, quantitative strategy development, derivatives risk management, program trading, execution services, and technology management.

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Dermot Harriss
Written by Dermot Harriss

Dermot Harriss joined OneMarketData in 2015, and is responsible for delivering solutions that help firms meet their regulatory compliance needs. Dermot brings over twenty years of financial industry experience from roles at Goldman Sachs, Morgan Stanley, and D.E. Shaw that included futures trading, quantitative strategy development, derivatives risk management, program trading, execution services, and technology management.

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