One question that comes up in the world of broker-dealer consulting is when and what to tell a regulator. This issue can arise in the context of a regulatory examination, responding to a regulatory inquiry, determining whether to self-report, or even in a FINRA OTR.
It is important to understand the context of the request in determining how to properly respond to a FINRA inquiry. First and foremost, a broker-dealer or registered representative should understand that FINRA’s Rule 8210 requires that its members and associated persons of members provide responses that are truthful and complete. And failure to do so can result in serious sanctions, including a lifetime from the securities industry. It is also important to understand that certain items require reporting whether or not FINRA has specifically asked for the information. For example, Rule 4530 requires reporting of certain complaint information and information about internal conclusions that broker-dealers may have made.
FINRA has also said that it will provide credit to firms who self-report or otherwise demonstrate extraordinary cooperation. For more information on this, see Regulatory Notice 08-70.
There are many things that are required by FINRA Rules to be reported. There are other things that are not specifically required to be reported, but probably should be. And then there are times when a response should simply answer the direct questions being asked by a regulator. Knowing the proper approach to preparing a regulatory response is critically important on many levels. If you have received a FINRA Rule 8210 letter, a request to appear for a FINRA OTR, or if you just have an issue that may need to be reported, make sure you contact a professional with extensive experience in addressing FINRA reporting requirements.
Mitch Atkins, FINRA’s former SVP and Regional Director is experienced in assessing FINRA regulatory inquiries and “FINRA Rule 8210 letters.” For help with your regulatory responses or a regulatory investigation, contact Mr. Atkins who is now Principal at FirstMark Regulatory Solutions in Boca Raton, Florida at 561-948-6511. Mr. Atkins is not an attorney and FirstMark Regulatory Solutions is not a law firm. Neither Mr. Atkins nor FirstMark Regulatory Solutions provide legal services.