FINRA report on broker-dealer management of conflicts of interest

Abstract

Purpose

To summarize the Financial Industry Regulatory Authority report on broker-dealer conflicts of interest.

Design/methodology/approach

Discusses background of recent FINRA information collection effort on conflicts of interest upon which FINRA based the report. Outlines FINRA objectives for firms to review their current conflicts management systems. Discusses three key areas where firms should focus attention, including examples of possible practices firms can undertake: a firm's general conflicts of interest framework across all business lines; new products creation and distribution; and compensation practices.

Findings

The report highlights areas that FINRA expects broker-dealers to consider in reviewing their compliance policies and procedures to assess whether firms should implement changes to their own conflict management frameworks. FINRA will evaluate whether to pursue future conflicts management rulemaking if broker-dealer firms do not make adequate progress on conflicts management.

Originality/value

Practical explanation by experienced financial services lawyer.

Citation

Anderson, S. (2014), "FINRA report on broker-dealer management of conflicts of interest", Journal of Investment Compliance, Vol. 15 No. 1, pp. 62-64. https://doi.org/10.1108/JOIC-01-2014-0011