New Topics and Material Highlight FINRA’s
Increased Focus on Market Integrity and Other Key Risk
Areas
On January 10, 2023, the Financial Industry Regulatory
Authority, Inc. (“FINRA”) published the 2023 Report on FINRA’s Examination and Risk
Monitoring Program (the “Report”). FINRA highlights
several topics as key areas of risk for investors and the markets,
including mobile apps, complex products and options, order
handling/best execution, Regulation Best Interest (“Reg
BI”) and Form CRS, and cybersecurity. FINRA’s focus on
these topics in 2023 is expected given that each has been the
subject of regulatory initiatives of FINRA and the US Securities
and Exchange Commission (“SEC”) in the recent past. The
regulators’ focus on these topics is likely to intensify with
the continued fallout from the collapse of FTX and other market
participants, particularly with respect to those business practices
and products with extensive use by, or impact on, retail
investors.
Notably, the Report also adds several new topics relating to
Market Integrity, including with respect to fair pricing
obligations for fixed income securities, trade reporting and order
handling…
