FINRA Releases its Risk Monitoring and Exam Priorities Letter for 2019-Part 3

Posted on January 25th, 2019 at 3:05 PM
FINRA Releases its Risk Monitoring and Exam Priorities Letter for 2019-Part 3

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 third in a series highlighting both FINRA’s new priorities, as well as ongoing issues discussed in the Letter.

Notably, FINRA addressed in a significant portion of its Letter the different “Market Risks” firms face in the industry. Some of the major issues FINRA addresses with regards to “Market Risk” include: “market manipulation”, “market monitoring”, and “best execution”.

To begin, FINRA stated that it will continue to focus on addressing market manipulation by enhancing its surveillance capabilities and providing firms with tools that they can use to identify possible manipulative activities. Moreover, FINRA plans on increasing machine learning to improve its ability to react to changes in the market and provide firms with cross-market supervision report cards. FINRA believes that issuing report cards will help firms identify potential manipulation across multiple firms, markets, and products and proactively address related compliance risks.

In addition, FINRA also will evaluate how firms monitor their customers’ activities to detect and prevent potentially manipulative or other prohibited trading activities.

Lastly, given that FINRA is concerned about firms failing to use reasonable diligence to assure that their customer order flows are directed to the best market, it will review firms’ best execution decisions. Furthermore, FINRA plans on reviewing how firms manage the conflict of interest between their duty of best execution and any inducements or benefits they receive from the routing or internalization of customer orders.

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

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Jim, Stephany and the whole team were a God send.  We felt like we were put into a situation where we had no advocate. Jim’s team came in with a strong, well laid out strategy on how to get our story heard. Where our outside compliance company had no ability to help, our Broker Dealer was impenitent, and the regulators were aggressive pursuing vague rules, Jim came like a barricade against an assault we did not understand. Though you pay member dues to be affiliated with FINRA and a B/D, you have no voice. The only thing that is truly heard in this un-level playing field is a bulldog’s bark like Jim’s. I would encourage anyone to call Jim and his team to find a real ally in the tough and complicated world of securities regulation. They are truly the best.

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