Cartana Consulting Solutions’ founder and principal, Ana R. Carter, attended the April 2, 2020 Small Firm Conference Call hosted by FINRA staff. The following are some of her most important take away points:
- FINRA has cancelled the 2020 Annual Conference in Washington, DC.
- The FINRA Annual Assessment invoices will be generated and distributed as usual; however, small firms will be allowed to defer payments and pay half of the invoice by September 1 and the other half by December 1, 2020. Firms are allowed to add back to net capital the accrued amount of the assessment.
- Temporary fingerprint relief has been granted by the SEC and FINRA. Any applicant with a pending U4 submitted between February 15 and May 30, 2020, will have until June 29, 2020 to submit the necessary fingerprint information. Guidance pertaining to individuals not subject to Rule 1010(d) (NRF’s) will be coming shortly.
- FINRA staff does not foresee enforcement focus on BCP changes; however, it is expected that member firms will document any changes (via a memo to file for example) that were needed to adapt to current events.
- FINRA reminds member firms that Rule 3310 requires annual compliance on a calendar year basis and firms have until December 31, 2020 to complete their AML testing.
- The SEC issued a statement on 4/2/2020 by Chairman Jay Clayton stating that Reg BI’s compliance date of June 30, 2020 remains in place. Firms affected by COVID-19 should engage with the SEC; however, all firms should continue to make good faith efforts to ensure compliance by that date.
- Firms should continue to evaluate circumstances and take risk factors into consideration when evaluating their branch inspections calendar.
- In regards to CARES Act loans, FINRA has issued guidance (on April 2, 2020) allowing for the liability arising from a qualified SBA loan to be treated as non-AI for net capital purposes (the loan amounts should be reported on line 1385 on the FOCUS Part IIA until forgiven). Qualified expenses paid prior to the forgiveness of the loan, can be added back to net capital and should be reported on line 3525 on the FOCUS Part IIA.
- A number of other filing dates have been extended until late May and will be evaluated on an ongoing basis.
- FINRA have received a number of inquiries regarding forwarding mail and test center closures – staff is working with the SEC on further guidance.
Firms should continue to monitor the COVID-19 websites for both FINRA and the SEC to ensure that they are staying up to date on new guidance.
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Cartana Consulting Solutions, LLC provides outsourced FINOP, CFO and general accounting services to small to medium sized broker dealers. Our goal is to provide outstanding service to each client while exemplifying honesty and integrity. You can learn more about us and our services by visiting our website at CartanaConsulting.com. Make sure to follow us on Facebook and LinkedIn to stay up to date with our latest news.