FINRA Chief Tells Wall Street: Don't Skimp on Compliance
FINRA Chief Executive Richard Ketchum addressed a room full of Wall Street executives this week at FINRA's annual conference. His primary message, according to Reuters, was that FINRA expects firms to comply with the new industry standards created by the wide-sweeping 2010 Dodd-Frank financial reform law.
In particular, Ketchum reminded firms that their brokers must "truly understand the products they sell." Firm approval alone won't satisfy suitability requirements anymore, he said.
"To all of you in legal and compliance, let me say this specifically: This is not the time to reduce your commitment to compliance investment," said Ketchum (as quoted by Reuters).
In Feb., James Shorris, FINRA's executive vice president and executive director of enforcement, said Regulation D private placements were going to be one of FINRA's top focuses in 2011. Ketchum reiterated that focus at the conference.
Additional concerns mentioned included the sale of structured products, such as reverse convertibles, principle protected notes, and exchange-traded funds.