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Abstract: 

Recent studies of “high-risk” registered representatives have revealed deficiencies in firm management of them, and have led to a new regulatory focus on their hiring and supervision. The authors describe FINRA’s focus on high-risk registered representatives through regulatory notices, rules, and enforcement actions. They then describe NASAA’s 2018 Enforcement Report and state enforcement actions brought against firms that failed to adequately supervise recidivist registered representatives. They close by noting steps firms must take in their supervisory plans to meet regulators’ expectations.

Keywords: FINRA Regulatory and Examination Priorities; NASAA Enforcement

Affiliations:  1: Sidley Austin LLP; 2: Sidley; 3: Sidley.