Examination and Risk Monitoring: FINRA 2023 Report

January 2023

KPMG Insights. FINRA’s Examination and Risk Monitoring Report highlights key areas of “expanded focus” such as Regulation BI and cybersecurity as well as emerging risks (including sanctions evasion) that will likely direct reviews in 2023. Firms should anticipate that examiners will be assessing how well their compliance activities in each of the topic areas align with the information contained in the Report, including: new material, exam findings, effective practices, and “relevant considerations.” Member firms are encouraged to also consider FINRA’s report in concert with similar releases by the SEC on its examination findings and priorities as well as anticipated rulemakings under its 2023 regulatory agenda.

The Financial Industry Regulatory Authority (FINRA) has published its 2023 Report on FINRA’s Examination and Risk Monitoring Program, providing insights into findings from recent oversight activities under its Member Supervision, Market Regulation, and Enforcement programs (collectively, “regulatory operations programs”).

The Report covers twenty-four (24) topics across five (5) key areas (including, i) Financial Crimes, ii) Firm Operations, iii) Communications and Sales, iv) Market Integrity, and v) Financial Management), representing a wider range of topics under these key areas than in previous years’ reports, a new section (Financial Crimes), and novel topics within the Market Integrity section. For each topic, FINRA:

• Identifies the relevant topics, rule(s), and/or oversight activities
• Summarizes findings or observations
• Outlines effective practices that FINRA observed through its regulatory operations programs
• Highlights key considerations for firms’ compliance programs

An outline of certain key risk areas, emerging risks, and new topics as identified by FINRA follows. 
 

Please refer to:

• KPMG Regulatory Alert | SEC Regulatory Agenda
• KPMG Regulatory Alert | Examination and Risk Monitoring: FINRA 2022 Report