Regulatory Notice 20-42

Comment Period Expires: February 16, 2021

Summary:

In response to the coronavirus (COVID-19) pandemic, member firms have made rapid and unprecedented changes to their business operations in order to prioritize the health and safety of firm personnel and investors, while maintaining the public’s access to capital markets. These changes include widespread use of remote offices and alternative work arrangements and new and expanded methods of engaging with personnel and investors. Member firms have also used new methods of engaging with FINRA and other regulators and complying with regulatory requirements. For its part, FINRA has taken numerous steps to assist member firms, firm personnel and investors as they navigate the effects of the COVID-19 pandemic.  

FINRA welcomes feedback on lessons learned from stakeholders’ experiences during the pandemic, including the impact of changes made to member firms’ operations and business models, and the effectiveness of business continuity planning. FINRA further requests comment on whether it should consider changes to its rules, operations or administrative processes to address lessons learned during the pandemic or to address anticipated long-term impacts of the pandemic on member firms and investors.

Questions regarding this Notice should be directed to:

• Jeanette Wingler, Associate General Counsel, Office of General Counsel (OGC), at (202) 728-8013;
• Emily Goebel, Assistant General Counsel, OGC, at (202) 728-8235; or
• Patricia Ledesma, Senior Economist, Office of the Chief Economist, at (202) 728-8461.

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Regulatory Notice 20-35

Summary:

FINRA warns member firms of a widespread, ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA asking member firms to complete a survey (see sample below). The email was sent from the domain “@regulation-finra.org” and was preceded by “info” followed by a number, e.g., info5@regulation-finra.org. FINRA recommends that anyone who clicked on any link or image in the email immediately notify the appropriate individuals in their firm of the incident.

The domain of “regulation-finra.org” is not connected to FINRA and firms should delete all emails originating from this domain name.

FINRA has requested that the Internet domain registrar suspend services for “regulation-finra.org”.

FINRA reminds firms to verify the legitimacy of any suspicious email prior to responding to it, opening any attachments or clicking on any embedded links.

For more information, firms should review the resources provided on FINRA’s Cybersecurity Topic Page, including the Phishing section of our Report on Cybersecurity Practices -2018.

Questions regarding this Notice should be directed to Dave Kelley, Director, Member Supervision Specialist Programs, at (816) 802-4729 or by email.

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Regulatory Notice 20-26

Summary:

FINRA reminds firms to evaluate their exposure to LIBOR (formerly, the London Interbank Offered Rate), and review their preparedness to manage LIBOR’s phase-out. To understand how firms are preparing for that phase-out, FINRA surveyed a representative cross-section of member firms, including some firms with significant trading volume or positions in LIBOR-linked securities. This Notice provides a summary of the results of the survey.

Questions concerning this Notice should be directed to:

• William Bidell, Director, Market Regulation, at (646) 315-8525 or by email;
• Roberto Setola, Senior Director, Member Supervision, at (202) 728 8035 or by email;
• Pat Tobin, Director, Member Supervision, at (212) 416-1505 or by email.

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Regulatory Notice 20-23

Summary:

For the past two years, FINRA has encouraged firms to keep their Risk Monitoring Analyst (formerly known as a “Regulatory Coordinator”) informed if the firm, or its associated persons or affiliates, engaged, or intended to engage, in activities related to digital assets, including digital assets that are non-securities.¹ FINRA appreciates members’ cooperation with this request and is encouraging firms to continue to keep their Risk Monitoring Analyst abreast of their activities related to digital assets until July 31, 2021.

Questions concerning this Notice may be directed to:

• Kosha Dalal, Vice President & Associate General Counsel, Office of General Counsel (OGC), at (202) 728-6903 or by email;
• Racquel Russell, Associate General Counsel, OGC, at (202) 728-8363 or by email; or
• Cara Bain, Assistant General Counsel, OGC, at (202) 728-8852 or by email.

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Steven Thornton was interviewed by Financial Advisor IQ regarding compliance deadlines for broker-dealers.

Click here to read the full interview!