FINRA recently announced its national exam priorities for 2016. These priorities reflect the practices and products FINRA believes present the greatest heightened risks to investors. For 2016, the letter addresses three primary policy issues that FINRA believes are key points of emphasis for firms in 2016. Those three points are:
• Culture, conflicts of interest and ethics;
• Supervision, risk management and controls; and
As in prior years, the Letter also delineates specific policies and procedures that will be used as a baseline when examining firms.
New Priorities for 2016 include:
• Outside Business Activities (OBAs) – FINRA will review a firms’ process for the receipt and assessment of registered persons OBA notifications, noting any surveillance for possible conflicts of interest.
• Client Onboarding – This is primarily focused on the capital and liquidity risks in the onboarding of new hedge funds, institutional traders, etc.
• 529 College Savings Plans – FINRA will be watching specifically share classes of 529 plans. Firms should be evaluating share class (primarily class C shares) for suitability given the long-term time horizon for the investments.
• Non-Traded REITs and Direct Participation Programs (DPPs)
Our experts will provide practical guidance and tips to assist your firm.