FINRA’s Regulatory and Examinations Priorities Letter

Now with nearly three decades of legal experience, Sylvia M. Scott joined Freeman, Freeman & Smiley, LLP, in 2005. As a partner, Sylvia M. Scott leads the firm’s Securities Practice Group, working with brokers and investment advisors in regulatory enforcement matters.

Among the items disbursed by the Financial Industry Regulatory Authority (FINRA) each year is a regulatory and examinations priorities letter. Also referred to as the exam priorities letter, this document outlines the areas upon which FINRA focuses its sweep and cycle examinations. Management must review the letter, whose items should be used to shape risk management procedures. For a larger firm, department heads should also receive a copy of the letter to ensure they meet compliance stipulations within their own respective areas.

Examples of issues addressed in an exam priorities letter include maintaining proper procedures for handling business in complex instruments and private placements. Additionally, the letter may highlight the necessity for eliminating promissory language in procedures that cannot be guaranteed by a firm due to the nature of a volatile investment market.

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