On Jan. 9, 2020, the Financial Industry Regulatory Authority (FINRA) released its 2020 Risk Monitoring and Examination Priorities Letter, in which it identifies its areas of examination focus for 2020. The cover note also highlights key changes in FINRA’s risk monitoring and examination program. These changes include the consolidation of FINRA’s three examination programs into a single risk monitoring framework. As part of this new framework, FINRA expects to categorize every FINRA member firm (“Firm”) into one of five business categories: (1) Retail; (2) Capital Markets; (3) Carrying and Clearing; (4) Trading and Execution; and (5) Diversified. Additionally, the cover note details FINRA’s plans to assign each Firm a senior agency leader who will be responsible for the Firm’s examination and risk monitoring.

As part of FINRA’s continuing efforts to provide Firms with compliance and risk management support, the president’s note also points out that this year’s Priority Letter includes a list of practical considerations and questions that Firms may use to assess and evaluate their risk management programs, as well as a new appendix with links to additional FINRA resources related to examination priorities.

Read the full GT Alert.

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Photo of William Mack William Mack

William B. Mack is a co-chair of the Financial Regulatory & Compliance Practice. He is experienced in advising companies on regulatory and compliance matters relating to the Securities and Exchange Commission regulations, the Exchange Act, Anti-Money Laundering laws and Financial Industry Regulatory Authority

William B. Mack is a co-chair of the Financial Regulatory & Compliance Practice. He is experienced in advising companies on regulatory and compliance matters relating to the Securities and Exchange Commission regulations, the Exchange Act, Anti-Money Laundering laws and Financial Industry Regulatory Authority (FINRA) rules.

William’s practice involves all aspects of broker-dealer regulation, including Self-Regulatory Organization (SRO) membership, supervision, employment, research, soft dollar arrangements, chaperoning of foreign broker-dealers, social media, use of foreign finders, anti-money laundering rules, alternative trading systems (ATS), exchanges, and market making issues. He also provides regulatory guidance to investment banking clients in connection with securities offerings and related trading issues.

William advises firms in the FINRA new membership (NMA) and the continuing membership (CMA) processes. William assists firms to develop or amend their written supervisory procedures and compliance manuals.

William routinely represents clients who are negotiating placement agent agreements, foreign finders agreements, clearing agreements, agreements with registered representatives and expense-sharing agreements.

William assists broker-dealers and their associated persons to respond to regulatory examinations and inquiries and provides effective representation in a range of enforcement proceedings with the SEC, FINRA, NYSE, state and foreign regulatory authorities. He regularly prepares and defends witnesses in FINRA on-the-record interviews and SEC testimony. Enforcement matters have involved issues including market manipulation, supervision, customer defalcations, insider trading, anti-money laundering, distribution of unregistered securities, direct market access, market making, soft dollar arrangements, cross border trading, electronic intrusion and customer impersonation, sales practices, supervision, private placements, ETFs, indexes, and other securities products.

William regularly addresses questions with respect to what activities require or are exempt from broker-dealer registration. William assists firms in obtaining guidance, interpretive letters, and no-action relief from FINRA and the SEC with respect to novel securities issues and the creation of new products and services. William also advises clients on cryptocurrency, tokenization, NFTs, DeFi structures, and digital asset exchanges and trading.

Prior to joining the firm, William was a Principal Counsel for Enforcement at FINRA. Before FINRA, he was the Director of the Executive Secretariat in the Office of the U.S. Trade Representative. William also served as a Deputy Associate Counsel at the White House, advising primarily on appointments and investigations. Before the White House, he practiced at large firms in New York. William clerked for Judge Robert L. Carter in the Southern District of New York.