On a macro level, the Priorities Letter makes clear that FINRA is continuing to work hard to strengthen its relationship with its member firms. FINRA 360 (its self-evaluation and organizational improvement initiative) remains a work in progress with a strong focus on efficiency, evidenced by the previously announced combination of the two Enforcement operations. While there has been no news of immediate efforts to eliminate additional duplicative programs at FINRA, the industry should expect various tweaks in the near term that will make life easier for FINRA member firms.
The Priorities Letter underscores FINRA’s willingness to be flexible in the examination process and its receptiveness to the escalation of issues that cannot be resolved with the primary examiner. On the Enforcement side, expect another year of cases focused on significant customer harm, vulnerable victims, and bedrock investor protection. Supervision cases that do not involve customer harm and “technical” violations will remain on Enforcement’s backburner, particularly for those firms who are proactive in detecting and remediating the issues.
The Priority Letter can be found at: http://www.finra.org/industry/2017-regulatory-and-examination-priorities-letter.
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