Exam Alert: Proposed FINRA rule will clarify firms’ supervisory responsibilities for outsourced activities
On March 29, 2011, FINRA requested comment on proposed FINRA Rule 3190. The proposed rule makes it clear that when a firm outsources a function or activity to a third party, the firm is still responsible for complying with applicable securities law and FINRA and MSRB rules. This responsibility cannot be delegated to another party. Firms will also be required to have supervisory procedures in place to ensure compliance with the rule.
http://www.finra.org/Industry/Regulation/Notices/2011/P123399
Exam Alert: proposed exam for Operations Professionals will focus on basics
On March 4, 2011, FINRA filed documents with the SEC that describe the content covered by the proposed exam for Operations Professionals. The exam will focus on ethics and basic knowledge of the securities industry regarding products, markets, and broker-dealer activities. An Operations Professional would not be held to the same standard of knowledge about a product as a product specialist or representative selling the product.
FINRA rule filing: http://www.finra.org/Industry/Regulation/RuleFilings/2011/P123267
Analysis by the Securities Technology Monitor: http://www.securitiestechnologymonitor.com/news/-27324-1.html
Exam Alert: SEC proposes amendment requiring broker-dealers to search for missing securityholders
On March 18, 2011, the SEC proposed an amendment to Rule 17Ad-17, which currently requires transfer agents to look for missing holders of securities. The amendment would extend this obligation to broker-dealers. Two database searches are required: the first one must occur three to twelve months after the securityholder becomes lost, and the second one must take place six to twelve months after the first search.