Four Proven Ways to Prepare for a FINRA Routine Examination – According to Leading Compliance Experts

Our guide, FINRA Audit Preparation Guide for Broker-Dealers, presents strategies and tactics to broker-dealers for improving compliance procedures and preparing for future FINRA audits.

Between Exams - Guide - CoverThis guide is based on interviews with four leading  compliance experts from around the country.

- Carrie Wisniewski, President and Founder of B/D Compliance Associates
- Carolyn May, Independent Compliance Consultant
- Steve Thornton, President and Founder of Thornton & Associates
- Virginia “Ginny” Voos, Senior Compliance Consultant at NCS Regulatory Compliance

FINRA regulates 3,600 member firms and nearly 630,000 registered reps and conducts over 2000 member firm examinations each year. FINRA conducts routine examinations of broker-dealers checking for compliance with industry rules and regulations. Depending on the firm, these routine investigations (or more commonly referred to as FINRA audits) occur once every one to four years.

FINRA reported a total of $61 million in fines in 2018. Although a slight decrease from $65 million in 2017, the average fine per action filed increased from $47,407 in 2017 to $66,232—a 40% increase. Inadequate practices reqarding suitability (FINRA Rule 2111) and deficient supervisory procedures (FINRA Rule 3110) remain common issues.

According to FINRA’s 2019 Examination Priorities Letter, highlighted areas of focus consist of online distribution platforms, fixed income mark-up disclosure, and regulatory technology. Additionally, core issues such as suitability, AML, and supervisory policies and procedures (FINRA Rule 3110) are top priorities.

The increasing cost of compliance – in time and money – is something broker-dealers face every day. The time to improve is when a FINRA audit is not on the near horizon.

Download our guide, FINRA Audit Preparation Guide for Broker-Dealers, to learn four proven ways to prepare for a routine FINRA examination:

  1. Utilizing FINRA resources
  2. Investing in software
  3. Testing often
  4. Promoting a compliance-friendly culture

To get this FREE resource simply fill out the form on this page. Be prepared for your next audit.