Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > FINRA

FINRA Consolidates 3 BD Exam Programs

Your article was successfully shared with the contacts you provided.

The Financial Industry Regulatory Authority said Monday that it was consolidating its three separate exam programs into a single, unified program.

FINRA’s Examination and Risk Monitoring Programs will be collapsed “to drive more effective oversight and greater consistency, eliminate duplication and create a single point of accountability for the examination of firms,” the broker-dealer self-regulator said.

The three exams — business conduct, financial and trading compliance — which are currently divided among three different programs will be consolidated “under a single framework designed to better direct and align examination resources to the risk profile and complexity” of FINRA member firms.

“Our Examination and Risk Monitoring program is central to our efforts to protect investors and guard the integrity of markets. After careful consideration and extensive feedback from internal and external stakeholders, we are moving toward a program structure that is based on the firms we oversee,” said Robert Cook, FINRA’s president and CEO, in a statement.

The consolidation will bring those programs “under a single framework designed to better direct and align examination resources to the risk profile and complexity of member firms.

“By directing our expertise and resources in a more tailored way, we will become more effective at examining for compliance.”

Planning for the consolidation is underway, FINRA said, under the leadership of FINRA’s exam chief, Bari Havlik.

Havlik said the “significant undertaking” is “well underway” and will continue through 2019.

Cook stated that FINRA has “begun to create and implement a roadmap that thoughtfully and methodically builds towards the new structure.”

The consolidation is part of FINRA’s top-to-bottom review under FINRA360.

Exams executed pursuant to FINRA’s Regulatory Service Agreements (RSAs) with exchange clients will be performed by a separate, specialized unit housed in FINRA’s Market Regulation department to ensure consistency across RSA exams, provide dedicated resources to RSA-specific rules and trading, and promote economies of scale for RSA client work, the broker-dealer self-regulator added.

“This group will work in close coordination with the consolidated FINRA Examination and Risk Monitoring team.”

Kenneth Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said SIFMA commends FINRA’s decision and that the trade group is “optimistic that, once fully implemented, this change will reduce inefficiencies and allow FINRA to more effectively deploy its resources and enhance the quality of its examinations.”

Cook announced in March that FINRA was assessing whether to consolidate exam programs into one, stating that FINRA would “be making a decision this year” on how to proceed.

As Cook has stated previously, some of the exam programs at FINRA were “never fully merged” after FINRA was created in 2007 from the consolidation of the member regulatory functions of the National Association of Securities Dealers and the New York Stock Exchange.

— Check out FINRA’s New Competency Exams a ‘Significant’ Event for Some BDs on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.