ADISA Submits Comments Regarding FINRA 2018 Exam Findings

Jan 18, 2019

ADISA responded and provided feedback on the 2018 Examination Findings issued by FINRA last month. ADISA routinely submits comment letters and related submissions in response to industry-related initiatives undertaken by regulators at the federal and state levels, and engages in frequent dialogue with legislators and regulators in order to supply them with useful information about alternative investments and their use in client portfolios.
ADISA had a number of enhancement suggestions, which include:

  • While the report will provide FINRA members with a sense of what the organization is seeing in the course of its examination program, the report could be further enhanced by clearly prioritizing or characterizing its observations, as well as identifying the standards FINRA used in determining whether to include an observation in the report.
  • Within the topics covered, ADISA believes that it would prove useful for FINRA to include information about potential solutions or steps that members used or may use to address shortcomings and other problems observed.
  • ADISA also believes that providing greater clarity around FINRA’s standards used for including an observation in the report would lead to fewer instances of the report’s conclusions being “sensationalized” in the press and elsewhere.
  • ADISA also suggested that the report explore the linkage, if any, between FINRA’s beginning-of-year examination priorities and observations made in the course of a calendar of examinations.
The letter was drafted by Catherine Bowman, The Bowman Law Firm, chair of ADISA’s Legislative & Regulatory Committee; Larry Sullivan, Passco Companies, vice-chair of ADISA’s Legislative & Regulatory Committee; and John Grady, DLA Piper, ADISA Board of Directors member. It was signed by ADISA Executive Director John Harrison.
Read the letter in its entirety here.