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FINRA’s guidelines for regulation compliance regarding COVID-19

On Behalf of | Apr 17, 2020 | FINRA |

The COVID-19 outbreak has thrown numerous industries into disarray. The financial sector is no different. Businesses, investors and shareholders are reeling from the impact of the ongoing pandemic.

One unexpected hardship has been the need to quickly adapt to the many new regulations from federal, state and local authorities. Fortunately, the Financial Industry Regulatory Authority (FINRA) has published several clarifications to help companies and individuals understand guidance and regulatory relief pertaining to COVID-19. What follows is a brief summary of the most salient points of FINRA’s directives.

  • Increased communication with FINRA

Because operations for many businesses have gone topsy-turvy, FINRA has, understandably, called for increased communication and reporting. FINRA is encouraging, but not requiring, member firms to inform the organization if they choose to activate their Business Continuity Plans. If a firm chooses not to contact FINRA about this or any related matter, another option is to discuss the disruption, delay or termination of operations with a financial advisor or attorney.

  • The suspension of certain actions

FINRA has temporarily relaxed or suspended certain procedures. This includes the on-site inspection of branch offices to prevent the contamination of workers and inspectors. Member firms also no longer need to update Form U4 or Form BR, since many employees must shelter in place due to the pandemic.

  • Careful adherence to new regulations

Finally and most crucially, FINRA is urging member firms and their counsel to pay attention to the ever-changing regulations pertaining to COVID-19. Adherence to these rules is essential for the continued success of businesses and individuals throughout Pennsylvania. Ignorance of a new regulation will not exempt a non-compliant party from civil penalties such as fines.

The duration of the pandemic remains uncertain. In the meantime, lawmaking bodies will no doubt continue to create new measures to cope with the virus. Businesses and individuals should keep up to date on these regulations as well as FINRA’s guidance and regulatory relief measures.



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