The exams never cease for some industry professionals.
Take licensed financial advisers working in brokerage firms in California and across the country, for instance. Their employers are periodically subjected at the entity level to examinations by the federal Financial Industry Regulatory Authority.
FINRA subjects all brokerage companies to those exams, which are actually detailed reviews of those firms, with an often extended onsite regulatory presence being a prominent feature.
How often do FINRA inspectors subject brokerages to exams?
There is no boilerplate process or timetable involved concerning FINRA brokerage examinations. Some firms are scrutinized in consecutive years, with others going a period of years between exams. An overriding catalyst that determines the exam cycle for a given firm is evidence of a problematic history, or what one recent national article on FINRA’s reviews terms “demonstrated disciplinary problems.”
That Investment News piece notes recent news pointing to a material change in the process. Reportedly, the authority will modify the exam schedule in a manner that will provide a bit of relief for small brokerages with so-called “clean records.” Principals of those firms have consistently complained that FINRA’s exam exactions and too-often visits materially disrupt business operation.
The new plan calls for reviews of those firms to be conducted once every four years. That alteration provides “a very meaningful savings and break for small firms,” says one industry commentator.
“Small” brokerages regulated by FINRA are generally defined as entities having as many as 150 employees.
Questions or concerns regarding a FINRA brokerage exam or other regulatory investigation having potential disciplinary consequences can be directed to proven attorneys at an established license-defense law firm.