
By Fred Wagstaff
Subscribe to our original industry insightsIn its 2022 Report on FINRA’s Examination and Risk Monitoring Program, FINRA has once again included the Customer Protection Rule (SEC Rule 15c3-3) and Liquidity Risk as exam priorities.
The Customer Protection rule requires firms to maintain custody of customer securities and safeguard customer cash by segregating these assets from the firm’s proprietary business activities and promptly deliver them to customers at their request. Firms can satisfy the requirement by keeping customer securities and cash in their physical possession or in a good control location such as a clearing corporation.
What should broker-dealers be doing?
FINRA also routinely reviews firm’s liquidity risk management practices and has included it in their list of 2022 priorities. If firm’s meet certain criteria under SEC Rule 17a-3(a)(23), they are required to have effective liquidity controls in place in their overall risk management framework.
What should broker-dealers be doing?
Oyster’ consultants are industry experts who can provide support and assist in keeping your firm compliant with industry regulations. Our finance and accounting consultants are leading experts in SEC Customer Protection Rule regulatory requirements, and will assist in keeping your firm compliant with industry regulations. We can also provide your firm with FINOP support or an outsourced FINOP who understands the industry and your firm but who also has the experience and resources to navigate regulatory nuances and interpretations.
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