Cheryl L. Haas | Legal Perspectives on Current Regulatory Developments for BDs and IAs

Many companies that transitioned to a work-from-home environment in early 2020 may have reasonably anticipated a return to the normalcy of in-office operations by the end of the year. Yet as 2021 commences, remote work has become the new normal and firms can expect this arrangement to continue through the first quarter of the year, if not longer. While working from home poses challenges for all businesses, it poses unique concerns for broker-dealers whose associated persons are conducting business from their homes. Broker-dealers must remain keenly attuned to the risks posed by work-from-home arrangements, including specifically the risk that registered representatives and other associated persons use their personal devices or other unapproved and unmonitored channels to communicate with clients and conduct business.

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FINRA’s examination program has undergone its most significant reorganization in decades. As stated in this press release, FINRA’s goal for the reorganization was to “consolidate its Examination and Risk Monitoring Programs, integrating three separate programs into a single, unified program to drive more effective oversight and greater consistency, eliminate duplication and create a single point of accountability for the examination of firms.” The new look of the examination program was released, along with new management, on Dec. 12, 2019.

For 2020, FINRA is prioritizing risk monitoring, surveillance, and examination programs to further its mission of investor protection and market integrity. The examination priorities are organized around four themes, which build on FINRA’s priorities from prior years: Sales practice and supervision; Market integrity; Financial management; and Firm operations.