Securities firms' culture and the role it plays in how a firm conducts its business is at the top of the Financial Industry Regulatory Authority's list of regulatory and examination priorities for 2016. '
Our goal is not to dictate a specific culture, but rather to understand how each firm's culture affects compliance and risk management practices,' FINRA's
chief executive officer Richard Ketchum said
. FINRA said it also plans to grade firms on how many phony bids to buy or sell stock they might have a role in facilitating, a tactic to clamp down on spoofing practices. Other 2016 priorities include seniors and vulnerable investors, private placements and Regulation A+ offerings, and fixed-income securities.
In particular, FINRA will assess whether:
- policy or control breaches are tolerated
- control functions are valued within the organization
- managers are effective role models of firm culture
- the organization proactively seeks to identify risk and compliance events
- non-conforming sub-cultures are identified and addressed