FINRA Thematic Review Examinations


On Sep. 3, FINRA issued podcast on examination program changes.


  • FINRA issued podcast entitled, Examination program: optimizing for the future.
  • Executive Vice President of Examinations, Michael Solomon, and Vice Presidents of Firm Group Examinations, Tom Mellett and John Martino, detailed recent changes.
  • Follows FINRA's publication of 2024 annual regulatory oversight report, see #197409.
  • Also FINRA's Jan. 2024 crypto asset communications targeted sweep, see #198906.
  • Examination Program
  • Introduced new type of exam review called thematic review, focus on business area or product where see heightened risk, or where firm may not be as focused as should be.
  • Way to compare and contrast firms’ controls and procedures across similarly situated firms in a particular product or an area where think there is a little elevated risk.
  • By doing across multiple firms with one or two management leaders over particular thematic review, have higher level of consistency in executing exam, gather info.
  • Conducted across different areas, from net capital to supervisory processes over communications with the public, off-channel communications, use of broker rankings.
  • Thematic reviews very focused on information gathering, likely ask to have a lot of interviews with business people in particular business unit, who designed, rolled out.
  • Also control people assigned to the business area or product that may be looking at.
  • Look for opportunities increase efficiencies; increase collaboration across exam team.
  • Assigned in certain situations individual that is responsible for really coordinating and working across the larger exam team to make sure certain communication occurring.
  • Consider size, scope of particular exam, spread out throughout year, multiple years.
  • Historically, after exam conclusion, only followed up immediately on findings that presented material ongoing risk, and through subsequent cause examination of a firm.
  • Changed process so right after close exam, if corrective action for exception not shown during exam, follow up shortly after exam ends to verify corrective action taken place.
  • Exception guidance groups designed to gather together across FINRA those with a high level of expertise in a particular area that has a lot of complexity and nuance.
  • When there is potential exception that exam team has found, bring to one of these exception guidance groups to review evidence, and group helps make determination.

Regulators FINRA
Entity Types B/D; IA
Reference Pod, 9/3/2024
Functions Compliance; C-Suite; Cyber; Exams; Financial; Legal; Operations; Risk; Technology
Countries United States of America
Category National Regulator
State
Products Cryptocurrency; Fund Mgt; Securities
Regions Am
Rule Type Guidance
Rule Date 9/3/2024
Effective Date 9/3/2024
Rule Id 224762
Linked to Rule :197409
Reg. Last Update 9/3/2024
Report Section US Investment

Last substantive update on 09/05/2024