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FINRA Reminds Firms of Their Obligations Under the FCPA

The Financial Industry Regulatory Authority (FINRA) (see here) is the largest independent regulator for all securities firms doing business in the United States. FINRA oversees nearly 4,560 brokerage firms, about 163,465 branch offices and approximately 630,820 registered securities representatives.

On the heels of increased FCPA scrutiny of financial institutions, private equity investors etc., specifically as to interactions with sovereign wealth funds and other foreign government owned or controlled investment vehicles, FINRA has released (here) a “Regulatory Notice” to remind firms of their “obligations under the Foreign Corrupt Practices Act.”

The notice states as follows:

“FINRA advises member firms to review their business practices to ensure they are complying with all of their obligations under the FCPA. A member firm’s failure to comply with its FCPA obligations will be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade).”

FINRA’s annual conference (here) will also feature a session that discusses the importance of a FCPA compliance program and due diligence of broker-dealers with foreign subsidiaries and affiliates.

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