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Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

E-Mail Guidance from FINRA …. What took you so long?

Posted in Broker-Dealer Regulation, FINRA Compliance

FINRA amended its supervisory rules to include new Rules 3110 and 3120.   See http://www.finra.org/Industry/Regulation/Notices/2014/P465941.  Those Rules replace FINRA Rules 3010 and 3012 and add some additional requirements. 

FINRA provided some additional guidance concerning  electronic communications, including customer correspondence and internal communications.  FINRA will now permit member firms to use a “lexicon-based” screening tool or system for email reviews.  Nonetheless, supervisors are still responsible for the system and how it operates.  Such guidance implies that FINRA is still going to review these supervisorty systems, and respond accordingly if something goes wrong.

In short, member firms need to be careful with email review and ensure their systems are operating properly.