On January 5, 2016, FINRA released its 2016 Regulatory and Examination Priorities Letter. It is instructive to learn that firm culture, ethics and conflicts of interest—and the significant role that all three play in the conduct of firm business—are top priorities for FINRA this year. CEO Richard Ketchum stated: “In 2016 FINRA will be looking for firms to focus on their culture and whether it is putting clients first … Our goal is not to dictate specific culture, but rather to understand how each firm’s culture affects compliance and risk management practices.”
Canadian regulators should take a page from FINRA’s book. For the investment dealer industry, the issues going forward are not about extensive additions to the rulebook, especially after four years of comprehensive rule-making, but the effectiveness of individual firms and advisors in meeting these rules. This requires close oversight and examination of firm conduct and behaviour. An important part of this exercise is examining the culture of the individual firms and guiding firms to the right culture.
You can access FINRA’s 2016 Regulatory and Examination Priorities Letter by clicking here.