Imagine for a moment that the FBI sent you a letter telling you that it had looked through all of your digital activity over the last month and it spotted some things that might indicate potentially illegal behavior by someone in your house. Included with the letter are dozens of pages with a recommendation for you to review it and address the suspicious items. How you go about doing that is up to you.
Welcome to the FINRA monthly cross-market equities supervision report cards!
Like the fictional example above, the new FINRA report cards are sent to FINRA broker dealers in an effort to help “identify and halt spoofing and layering activity.” The challenge is the report cards are effectively flat files with potentially thousands of lines of data that the receiving firm is expected to analyze for compliance. How the firm goes about analyzing the data is your problem.
Regulators are great at defining a problem and crafting rules to be followed by the firms under their jurisdiction. However, when it comes to the technologies and processes required to comply with these new regulations the rule makers are almost always zero-help.
To be fair, it’s not the regulator’s job to create compliance tools or design specific processes for you and your team to follow. Their job is to protect the consumer and the integrity of the financial markets.
How to handle the new FINRA Equity Report Card?
Many firms are using internally-built systems for trading surveillance, risk management, and compliance. This may have made sense a decade or so ago given the nature of the regulatory environment and the speed in which trading technology was evolving. Firms simply couldn’t wait for an outside vendor to build what they needed.
Now however, regtech companies like Eventus Systems are delivering independent solutions that operate at the speed required to service all volume levels of trading operations and iterating to meet an ever changing regulatory environment. The effect is a better solution at a lower price created by cross-client knowledge and economies of scale.
Our latest offering, Validus Cloud, takes this approach a step further by making a technology solution previously only available to the largest trading firms available to even the smallest broker dealer, proprietary trading shop, or asset manager. And like all modern SaaS tools we’ve made a version available for you to try for free. It’s called Validus Express.
The goal is to help you tackle your FINRA report card and to help you stay on top of surveillance, risk management, and compliance without the need to wait for your tech team to get you on the schedule. Every day you wait puts you and your firm at risk.
Micro Business Case: 98% Reduction in FINRA Layering and Spoofing exceptions.
One of our clients started out with at FINRA report card with thousands of potential exceptions. Using Validus, they were able to shrink that number down 98% over the course of a few months.