Is Your Firm Not FINRA Compliant? 3 Warning Signs to Look Out For

As a business owner, you must manage several vital factors to keep your company afloat. Much of your focus may be on sales and financials, but have you carefully examined compliance with FINRA?

FINRA is serious when monitoring broker-dealers and enforcing strict rules and regulations. As much as possible, you need to maintain a FINRA compliance checklist to prevent violations that can result in unwanted consequences.

Ensuring FINRA compliance chat text messaging apps security may not be on your list. So, how certain are you that your business is not close to a violation? Here are three warning signs you should check:

  1. You Are Unsure What to Archive

FINRA’s top priority is to regulate business communications to ensure transparency and privacy. However, as official correspondence changes, you might be overwhelmed with which form of communication requires archiving.

FINRA does not discriminate on the application your business uses to convey information. Whether external or internal – the organization’s examiners will look into every possible channel and require records on short notice.

The following are some communication modes you might want to start documenting and reporting to FINRA:

  • Emails
  • Text messages
  • Instant messaging platforms
  • Website updates
  • Social media platforms
  • Any other platform used for communications

Remember, implementing a no-texting policy won’t excuse your business. If your employees use mobile phones to converse, you are still responsible for producing records of those.

  1. You Don’t Know How to Archive

With the abundance of messages you receive and send daily, it can be challenging to figure out how to record and archive all of them. Many businesses have no idea how to record this critical data, resulting in a significant risk of penalties from FINRA.

Take note that representatives of FINRA could pay a visit and request a specific conversation from any of your communication channels. Having a reliable archive lets you quickly produce copies without having to sift through thousands of messages.

  1. You Lack Written Supervisory Procedures

While you may have archives, your business might face legal consequences for not having the mandated supporting documents about your supervisory procedures. 

According to FINRA rule 3310, transaction supervision, internal communications, customer communications, and customer complaints must all be addressed in a firm’s documented supervisory processes.

Stay Compliant with FINRA

To ensure your business maintains a healthy relationship with FINRA, we highly recommend partnering with LeapXpert and leveraging their powerful archiving solutions. Visit their website to book a demo.