A much-anticipated FINRA report concludes that broker-dealers must do more to manage conflicts of interest.
FINRA said that the report, published on October 14, 2013, highlights “effective conflicts management practices that may go beyond current regulatory requirements and identify potential problem areas,” according to the statement of FINRA CEO Rick Ketchum.
The report focuses on how firms can strengthen their conflicts frameworks, starting with a “tone from the top” and flowing through the firm’s structures, policies, processes, training and culture. FINRA states that the report emphasizes the process of and approach to identifying and managing conflicts, rather than listing an inventory of conflicts that firms face.
The report summarizes best practices that FINRA observed related to each of these approaches, and attempts to distinguish between procedures at large and small firms. Our alert includes a discussion of FINRA’s recommended best practices.
Read our client alert.