FINRA’s Risk Monitoring and Examination Priorities

The “Risk Monitoring and Examination Priorities Letter” is an annual publication by FINRA that outlines their areas of focus for the upcoming year. It serves as a guidepost for broker-dealers, market participants, and investors by illuminating FINRA’s priorities and highlighting the key risks and challenges they intend to address. This proactive approach ensures that financial firms are well-prepared to align their practices with FINRA’s expectations.

Key Insights and Trends:

1. Market Integrity: The Priorities Letter underscores FINRA’s commitment to maintaining market integrity. It delves into how FINRA plans to detect and address potential market manipulation, insider trading, and other fraudulent activities that can undermine the fairness of financial markets.
2. Digital Assets and Cybersecurity: In the evolving landscape of digital assets and technology-driven financial services, the report sheds light on how FINRA is focusing on monitoring the related risks. Cybersecurity threats, digital asset offerings, and the implications of emerging technologies are often covered in this section.
3. Operational Risks: Understanding the operational risks faced by firms is critical. The report outlines the examination priorities related to areas like customer protection, anti-money laundering (AML) compliance, and supervision of remote offices and personnel.
4. Sales Practices and Suitability: Ensuring that financial products and services align with the needs and risk tolerance of investors is a recurring theme. The Priorities Letter provides insights into how FINRA intends to evaluate firms’ sales practices and ensure suitable recommendations to clients.
5. Regulatory Compliance: The report delves into regulatory and compliance matters, including how FINRA aims to address challenges related to the implementation of new regulations and adherence to existing ones.

Access the FINRA Risk Monitoring and Examination Priorities Letter:

Access the latest “Risk Monitoring and Examination Priorities Letter” through this direct link to the report.