Relief Is in Sight

The $2.2 trillion CARES Act contains key provisions, which may directly assist small broker-dealer firms in weathering the COVID-19 pandemic crisis.

While the provisions of the CARES Act are still being reviewed, we want to share with you some points that may assist you with retaining your employees and keeping your operations running as smoothly as possible.

Regulatory Extensions Announced for COVID-19

Effective March 20, 2020, FINRA released FAQs related to the COVID-19 pandemic and the impact the virus will have on small FINRA member firms meeting various FOCUS Report and annual audit requirements over the coming months.

ACI’s Calendar of Upcoming Events

In April of 2019, Elizabeth Attanasio will join a team of committee members of the NYSSCPA’s Stock Brokerage Committee in meeting with the PCAOB, FINRA and the SEC to discuss hot topics resulting from the 2018 audit year end. The purpose of this meeting will be to educate the PCAOB on challenges the FinOps and auditors face and the impact this has on the FINRA member firms, from both a cost and time perspective. We would welcome your feedback on any topics you would like us to raise on your behalf.

In May of 2019, Jay Gettenberg will be a speaker at the NYSSCPA’s Annual Broker Dealer Conference at Baruch College, where hot topics related to financial operations and auditing of small broker dealers will be discussed in a full day session. There will be a variety of presenters, including attorneys, FinOps, compliance professionals and regulators, to discuss current regulatory and collectively work to both educate and improve the industry as a collective.
> Link to register:

From May 15 to May 17 2019, both Jay Gettenberg and Elizabeth Attanasio will be attending the FINRA annual conference in Washington D.C. ACI attends this event every year to remain current on regulatory matters and to help all existing and future clients comply with relevant rules and regulations and implement best practices.
> Link to register:

We hope you will have the opportunity to join us at these events.

As always, we pride ourselves on being actively involved for each of you and intend to represent and defend the small broker dealer community to the best of our ability.

New Executive Regulatory Titles for FinOps

Effective October 1, 2018 the new FINRA licensing program will go into effect. As part of the program, FINRA will be changing the executive title designations for those industry professionals who previously served as the Financial and Operations Principal (FINOP). Each member firm will be required to designate the following titles:

  • Principal Financial Officer (PFO) with primary responsibility for financial filings and the related books and records
  • Principal Operations Officer (POO) with primary responsibility for the day-to-day operations of the business, including overseeing the receipt and delivery of securities and funds, safeguarding customer and firm assets, calculation and collection of margin from customers and processing dividend receivables and payables and reorganization redemptions and those books and records related to such activities

Both the Principal Financial Officer and Principal Operations Officer must qualify and register as an Operations Professional (Series 99) and must hold the Financial and Operations Principal (FINOP) Series 27/28 exam, as applicable.

Introducing firms, who operate in a non-clearing capacity, will be permitted to allow one person to hold both the PFO and POO designations, due to the reduced likelihood of operational issues associated with the activities of these firms.

Clearing or self-clearing firms, who take possession of customer funds and are responsible for the safeguarding of customer cash and securities, will be required to appoint two distinctly separate individuals to these two positions, each requiring the respective Series 99 and Series 27 licenses.

Although this rule may appear on the surface to only be a cosmetic change, particularly for non-clearing broker dealers, it will be interesting to see how FINRA reviews the change of these roles in upcoming cycle examinations. FinOps need to be mindful of the added responsibilities of these roles and should be evaluating the impact to their respective firms with their Chief Compliance Officers. Firms may also need to update their Written Supervisory Procedures (WSPs) accordingly.