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Stories of Interest
- North Korean caught secretly mining bitcoin rival
- IPO Timelines Cut by 80% After SEC's Private Filing Decision
- How the Carried Interest Break Survived the Tax Bill
- FINRA: The Neutral Corner
- Coinbasex Says Buying and Selling Temporarily Disabled Amid Price Rout
- Bitcoin plunges by more than a third in a single day
- Goldman Is Setting Up a Cryptocurrency Trading Desk
- Jefferies Lets Employees Choose When to Receive Their Bonuses
- UBS Told to Pay $903K After Losing Retaliation Verdict
- BEWARE: Long Island Iced Tea Shares Soar After Changing Name to Long Blockchain
- Gary Cohn’s Last Laugh: Cashing Out on Trump’s Tax Plan
- E*Trade Lets Customers Trade in CBOE Bitcoin Futures
- Swiss Find Serious Shortcomings at JPMorgan in 1MDB Case
- Washington-based Investment Adviser and His Business Partner Charged in Multi-Million Dollar Scheme
- FINRA Board of Governors Meeting
- Cryptocurrency Market Now Doing Same Daily Volume as the NYSE
- Jailed Barclays Trader Must Pay $400,000 From Libor Profits
- Trump Asks ‘How’s Your 401(k)?’ But Most Voters Don’t Have One
- A Bitcoin Hedge Fund’s Return: 25,004% (That Wasn’t a Typo)
- Madoff Victims Near Full Recovery of Principal With Payout
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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?