FINRA Releases its Risk Monitoring and Exam Priorities Letter for 2019-Part 2

Posted on January 24th, 2019 at 3:03 PM
FINRA Releases its Risk Monitoring and Exam Priorities Letter for 2019-Part 2

From the Desk of Jim Eccleston at Eccleston Law LLC:

FINRA has released its 2019 Risk Monitoring and Examination Priorities Letter to the public. This is the second in a series highlighting both FINRA’s new priorities, as well as ongoing issues discussed in the Letter.

To begin, in the second part of the Letter, FINRA addresses two major “Sales Practice Risks” firms encounter in the industry: suitability and senior investor protection.

FINRA emphasized that suitability will remain one of its top priorities. More specifically, FINRA will focus on the following with regards to suitability: (1) deficient quantitative suitability determinations or related supervisory controls; (2) overconcentration in illiquid securities such as variable annuities, non-traded alternative investments and securities sold through private placements; (3) recommendations to purchase share classes that are not in line with customer’s investment time horizon or hold for a period that is inconsistent with the security’s performance characteristics; and (4) whether firms are meeting their suitability and risk disclosure obligations when recommending exchange-traded products and collateralized loan obligations.

In addition, FINRA plans on continuing to focus on how firms are protecting senior investors from fraud, sales practice abuses, and financial exploitation. FINRA will evaluate individual firms’ supervision of accounts where registered representatives serve in a fiduciary capacity, including holding a power of attorney and acting as a trustee or co-trustee for senior investors.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, finra, sales practice risks, financial exploitation

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