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FINRA

FINRA can heavily fine or even shut down non-compliant firms and brokers

 

Framework Snapshot

America’s investment community relies on fair financial markets. The Financial Industry Regulatory Authority (FINRA) is a government-authorized, non-profit organization that protects investors and ensures market integrity. FINRA compliance is essential for keeping U.S. financial institutions and their clients safe.

FINRA requires all brokers to be licensed and registered and ensures they have passed exams, have the correct qualifications, and meet continuing education requirements. Investigations are conducted when violations of FINRA and SEC rules are suspected. FINRA can heavily fine or even shut down non-compliant firms and brokers.

FINRA Automation: Compliance for Less

The SureShield platform simplifies FINRA compliance by automating technical controls and guiding you through operational controls. SureShield’s automation will reduce your overall FINRA compliance cost by up to 90% when compared to traditional, labor-intensive compliance methods. For organizations requiring compliance to multiple frameworks, crosswalk automation drives cost savings up toward 90%.

FINRA Enforcement Process

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    What Else Does FINRA Do?

    Establish, Enforce Industry Rules

    FINRA requires that financial brokers be licensed, registered and adequately meet their continuing education requirements.

    Detect Wrongdoing

    FINRA detects insider trading and any strategies used by firms that may give them an unfair advantage.

    Discipline Non-Compliance

    If brokers break FINRA’s rules, FINRA imposes hefty fines, suspensions, and can even bar brokers.

    FINRA provides critical, aggressive regulatory oversight that keeps the U.S. markets safe and fair. Operating under the SEC, FINRA is the largest independent regulator of U.S. securities firms. FINRA protects investors by monitoring more than 624,000 brokers and analyzing billions of daily transactions.

    FINRA maintains an extensive library of compliance resources and tools including templates, checklists and directories to help industry members meet regulatory requirements. FINRA compliance helps protect U.S. market integrity through various oversight activities, which are listed below.

    1. Examines firms for compliance with FINRA and SEC rules
    2. Fosters transparency in the marketplace
    3. Educates investors
    4. Enforces high ethical standards
    5. Implements investor safeguards
    6. Establishes and enforce industry rules
    7. Detects wrongdoing
    8. Disciplines non-compliance
    9. Resolves securities disputes

    2024 Updates

    The Financial Industry Regulatory Authority (FINRA) has been actively addressing cybersecurity and compliance nuances in its regulatory oversight. Below are some key points from the 2024 FINRA Annual Regulatory Report:

    1. Cybersecurity incidents (e.g., account takeovers, ransomware, network intrusions) can expose firms to financial losses, reputational risks, and operational failures. FINRA expects firms to maintain cybersecurity programs consistent with their risk profile, business model, and scale of operations.
    2. Firms should prioritize robust frameworks to mitigate cybersecurity risks, comply with regulations, protect customer data, ensure business continuity, and promptly report incidents.
    3. The SEC has adopted rules requiring public reporting companies to disclose material aspects of cybersecurity incidents within four business days and proposed a cybersecurity risk management rule to address risk through written policies and procedures.
    4. FINRA provides resources to address ongoing and emerging threats to firms and investors through its Cybersecurity Topic Page and the new Industry Risks and Threats Resource Page. New SEC Cybersecurity Rules.
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    Activate FINRA framework

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    Install scanner for compliance evidence gathering

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    Review baseline evidence to score compliance control status

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    Close compliance gaps

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    Ongoing compliance and gap surveillance

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    Enforced maintenance of compliance readiness

    Free COMPLiANCE Assessment

    Do you need help assessing your compliance readiness? Learn how our automated crosswalk technology will dramatically reduce your labor requirements. Schedule your free consulting session, up to 1 hour.

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