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- State Street Challenging BNY Mellon As Largest Custody Bank
- Changes to FINRA Advisory Committees: Phase 1
- SEC Approves CAT Fee Dispute Resolution Process
- Boston-Area Consultant & Friend Settle SEC Insider Trading Charges
- SEC Chair Clayton: Statement on Status of the Consolidated Audit Trail ('CAT')
- Goldman to Launch $5bn Fund with China Investment Corp.
- Wells Fargo Launches Robo-Adviser Targeting Millenial Investors
- Barclays Fails to End U.S. 'Dark Pool' Class Action
- Goldman Sachs' Chief Risk Officer, Craig Broderick, to Retire
- Time to Renew FINRA Registrations - B/D, IA, Agent, IA Rep, Branches
- New Jersey’s Next Governor Could Be a Democrat Who Worked at Goldman Sachs
- FINRA New York Region Networking Seminar - December 1st
- SEC Approves “Pay-to-Play” and Related Rules for Capital Acquisition Brokers
- Hedge Fund Giant Paul Singer Targeted for Destruction by Steve Bannon
- Saudi Arabia's arrest of Prince Alwaleed 'would be like arresting Warren Buffett or Bill Gates' in the US
- Arrest of Billionaire Saudi Prince Touches Sizable Stakes - Citigroup, Twitter, Lyft
- New York Fed President William Dudley set to announce retirement
- FINRA Arbitration Panel Rules Against ex-LPL Broker in $30Mn Lawsuit vs. Firm
- OOPS! Goldman, JPMorgan, BofA Fail in Pricing an IPO
- Former Merrill Broker Pleads Guilty to Fee Fraud, Faces Up To 25 Years
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NEWSLETTERS & ALERTS
Wrong Way to Change SEC, FINRA Exams Under Trump
by Howard Haykin
“The nature of examinations has typically become more focused in scope," adding that such “deeper dives” pose a greater burden on firms because the regulators probe the issue “at a much more profound level.”
If such an approach to regulatory oversight becomes reality, then all I can say is the SEC and FINRA are making a big mistake.
For regulators to be effective, they need strong relationships with the firms they oversee. And with all relationships, communications is key. Communications come with dialog and interaction. So, how can conducting fewer examinations lead to strong, effective relationships? IT CAN'T! No matter how focused or deeply scoped the exam agenda may be.
FINANCIALISH TAKE AWAY. This writer has always been a proponent of frequent, quick strike audits and exams - and top-down, rather than bottom-up, reviews of companies and their inherent systems. For example:
- Why visit a registered investment advisor, or RIA, once every 3-4 years for a "soup-to-nuts" exam, when field examiners can conduct more frequent exams that focus on just 1 or 2 areas at a time - e.g., broker-dealer relationships, advertising, or trade allocations among separate accounts?
- Why examine a handful of trades out of thousands executed at a broker-dealer, when field examiners can better assess the competency of firm's staff through directeds Q&A or interview sessions?
By visiting B/D's and RIA's more frequently, while changing up the exam agenda and scope, regulators will get more "bang for the buck." The SEC and FINRA will not only improve their relationships with financial institutions, but they will influence brokers and advisors to take a more serious approach to their overall supervisory policies and procedures.
Your thoughts, Messieurs Robert Cook and Jay Clayton?