Skip to content
DWT logo
People Services Insights
About Offices Careers
Search
People
Services
Insights
About
Offices
Careers
Search
Publications
Securities & Derivative Litigation

FINRA Announces 2015 Regulatory Priorities

By Candice M. Tewell
January 2015
Share
Print this page

On Jan. 6, 2015, the Financial Industry Regulatory Authority (“FINRA”) released its 2015 Regulatory and Examination Priorities letter highlighting risks and issues FINRA believes could adversely affect investors and market integrity. The 15-page letter to broker-dealers outlines a number of areas FINRA examiners will focus on as part of their inspections this year, from sales practices around complex securities to firms’ approaches to cybersecurity risk management to the use of abusive trading algorithms.

This year’s letter opens by highlighting five areas in which it has seen recurring challenges or shortcomings in broker-dealer activity:

  • Alignment of firms’ interests with those of their customers;
  • Standards of ethical behavior;
  • Development of strong supervisory and risk management systems;
  • Development, marketing, and sale of novel products and services; and
  • Management of conflicts of interest.

These challenges cut across and can affect many of the areas of focus described in the letter.

FINRA’s areas of focus for 2015 cover a broad spectrum. Some are product-focused concerns, for example the sale of interest rate-sensitive fixed income securities and floating-rate bank loan funds. Another area of focus will be high-risk and recidivist brokers, who can cause outsized risk to investors. FINRA is also seeking to protect the growing population of senior investors, noting that “[t]he consequences of unsuitable investment advice can be particularly severe for this investor group since they rarely can replenish investment portfolios with fresh funds and lack time to make up losses.”

Cybersecurity is becoming an area of focus for FINRA as it has for public and private companies across the globe. FINRA examiners will now “review firms’ approaches to cybersecurity risk management, including their governance structures and processes for conducting risk assessments and addressing the output of those assessments.” In early 2015, FINRA expects to publish the results of a 2014 sweep investigating the types of threats to which member firms are subject.

Another specific problem area already subject to FINRA sweeps launched in July 2014 are brokerages’ order-routing practices. Early reviews of routing decisions “show that some firms do not have active best execution committees or other supervisory structures in place to meet their obligation to regularly and rigorously evaluate the quality of customer order executions.”

For more information, you can find FINRA’s 2015 Regulatory and Examination Priorities letter here.

Related Articles

2025
Feature
Financial Services
New Administration Outlook: Helping You Navigate Post-Election Uncertainty in 2025 and Beyond Read More External Link
05.22.25
Insights
White Collar, Investigations & Government Controversies
DOJ Criminal Division Reveals New White-Collar Crime Enforcement Priorities and Corporate Enforcement Policies Read More
04.02.25
Insights
Litigation
Delaware Enacts Sweeping Changes to the Delaware General Corporation Law Read More
DWT logo
©1996-2025 Davis Wright Tremaine LLP. ALL RIGHTS RESERVED. Attorney Advertising. Not intended as legal advice. Prior results do not guarantee a similar outcome.
Media Kit Affiliations Legal notices
Privacy policy Employees DWT Collaborate EEO
SUBSCRIBE
©1996-2025 Davis Wright Tremaine LLP. ALL RIGHTS RESERVED. Attorney Advertising. Not intended as legal advice. Prior results do not guarantee a similar outcome.