What You Need to Know
- Sweeps involving options account opening and SPACs are on the horizon, FINRA CEO Cook says.
- The regulator also plans to look at firms' use of paid social media influencers.
- A sweep on zero-commission trading is ongoing, Cook said.
Robert Cook, president and CEO of the Financial Industry Regulatory Authority, warned broker-dealers Thursday to brace for targeted sweeps involving options account opening and special-purpose acquisition companies, as well as “Finfluencers.”
FINRA, Cook said during the Securities Industry and Financial Markets Association’s Compliance and Legal virtual summit, “is in the early stages of preparing some targeted sweeps” in these areas.
“We’ve been interested in options account opening compliance; that will be one sweep that we intend to do — [focusing on] the due diligence that’s being conducted in that space,” Cook said.
FINRA also continues “to be interested in the SPAC space and the conflicts of interest that might be there. I expect we’ll do a sweep in that space as well,” Cook relayed.
Also under consideration: a sweep in the area of “finfluencers,’ more specifically how firms supervise activities and communications related to paid social media influencers,” he said.
Ira Hammerman, SIFMA’s general counsel, who interviewed Cook, noted one trend that the industry has been experiencing “is this prolonged zero interest rate environment combined with some firms moving to zero commissions.” Also, he said, “there are every day new fintech companies entering the securities industry.”