Finra Regulation Inc

“Finra is the sole not-for-profit stockholder of finra regulation, inc.”

“Finra, the sole not-for-profit stockholder, elects all members of the governing body.”

“Finra, the sole not-for-profit stockholder, retains the following authority and functions: 1) to exercise overall responsibility for ensuring that the association's statutory and self-regulatory obligations and functions are fulfilled. 2) to delegate authority to the subsidiaries to take actions on behalf of the association. 3) to elect the subsidiary boards of directors. 4) to review the rulemaking and disciplinary decisions of the subsidiaries. 5) to coordinate actions of the subsidiary boards as necessary. 6) to resolve any disputes among the subsidiaries. 7) to administer common overhead and technology of the subsidiaries. 8) to administer the office of internal review as provided in the association's by-laws. 9) to manage external association relations on major policy issues. 10) to direct the subsidiaries to take action necessary to effectuate the purposes and functions of the association. 11) to take action ab initio in an area of responsibility delegated to subsidiaries.”

“The form 990 was reviewed by senior management at various steps throughout the preparation cycle. The audit and management compensation committees reviewed and approved the organization's 2015 form 990 on september 29, 2016. The board was provided access to the final form 990 for review (via a website for board members only) prior to filing.”

“The organization has written conflict of interest policies for board members and employees. The written conflict of interest policy for board members requires initial disclosure of interests that could give rise to conflicts as well as annual disclosure by the same board members. Additionally, the written policy contains an ongoing obligation of board members to disclose potential conflicts of interest as they arise. Finra's code of conduct applies to all employees of finra and defines the expectation of everyone who acts on finra's behalf. The code includes a written conflict of interest policy that precludes employees from having a direct or indirect interest in or relationship with any organization where these interests could conceivably: a) hinder finra's objectivity, independence or judgment or conduct in carrying out finra's responsibilities or b) create the appearance of a conflict. Employees have an ongoing responsibility to report conflicts under the code and must certify compliance with the code of conduct within 30 days of hire and annually thereafter. Employees are regularly reminded of the resources that are available when they are unsure what to do. In addition to talking to departmental management, employees can discuss conflict-related concerns with finra's office of general counsel. If they are uncomfortable disclosing an issue and disclosing their identity, they can use finra's 24-hour ethicspoint hotline to pose questions or report concerns. Finra's whistleblower policy forbids retaliation against employees who report suspected misconduct in good faith, even if the report ultimately proves to be erroneous.”

“The management compensation committee of the finra board of governors (the "committee") is responsible for setting pay for executives of finra and subsidiaries whose total compensation, including incentive compensation, may exceed $1 million. The committee is comprised of four non-employee, non-securities industry members of the board of governors. The committee met on january 29, 2015 and february 11, 2015 to establish incentive compensation attributable to the performance of services during calendar year 2014 and to establish base salaries for calendar year 2015. As a general policy, finra has determined its competitive compensation positioning should be considered against a broad section of financial services/capital market companies, as this sector is the most likely from which we recruit talent and that would recruit talent away from the company. We also benchmark against general industry positions and law departments for jobs that are not unique to the financial services industry. The committee engaged mercer, inc. ("mercer"), a third-party compensation consultant, to prepare a compensation study for review at these meetings. In determining a benchmarking strategy for key executives, financial services organizations (broker-dealers, investment banks, federal reserve banks, commercial banks, insurance companies, exchanges and regulators) were determined to be the most relevant groups for comparison purposes. The committee and mercer engaged in substantial research and consideration of the functions and operations of several potential comparators as well as general competitive conditions. In determining specific salary and incentive compensation levels for officers and key employees, management and the committee consider: 1) operational results 2) strategic initiatives 3) financial health/results 4) individual performance 5) competitive compensation levels as prepared by mercer, inc., a third-party compensation consultant the committee's minutes of the january 29, 2015 and february 11, 2015 meetings were reviewed and approved as accurate and complete following the committee's approval of the senior executive compensation packages. The full board further approved the 2014 incentive compensation of the ceo at its meeting on february 11, 2015. All compensation committee members voted for the proposed level of executive compensation.”

“The organization makes its governing documents and the finra consolidated audited financial statements available upon request.”

“The officers / key employees listed in form 990, part vii, column b, devote an average total of 60 hours per week to the filing organization and any or all of the following related organizations: financial industry regulatory authority, inc. Finra dispute resolution, inc., and finra investor education foundation. Form 990, part vii, column c only those employees with a direct reporting relationship to the president are considered key employees for purposes of the finra regulation, inc. Form 990. This may result in an active employee being designated as former.”

“On december 20, 2015, finra dispute resolution, inc. Was dissolved and merged into finra regulation, inc. The bylaws of finra regulation, inc. Were updated to include all sections of dispute resolution, inc.'s bylaws. Firna regulation, inc. Also increased the number of directors who could serve on the board from 15 to 17.”

“The financial information included in the form 990 is presented on a stand-alone basis with all significant intercompany receivable and payable amounts eliminated and does not represent the consolidated results for financial industry regulatory authority, inc. (finra) and its subsidiaries. The financial information presented reflects estimates of overhead allocations. The 2015 form 990 should be read in connection with the 2015 finra annual financial report which is available at www.finra.org/about/annual-reports-financials. See also separate 2015 form 990's for related entities, including finra, finra dispute resolution, inc., and finra investor education foundation.”

“Finra is an independent, non-governmental regulator for all securities firms doing business with the public in the united states. Through finra regulation, finra oversees nearly 4,000 brokerage firms, approximately 162,700 branch offices and more than 643,000 registered securities representatives. Finra is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry. 4a) market regulation finra's market regulation department oversees and regulates over-the-counter trading of exchange-listed and non-exchange-listed securities and corporate and municipal debt for compliance with finra and municipal securities rulemaking board (msrb) rules and federal securities laws. Market regulation also provides regulatory services to the bats, cboe, ise, miax, nasdaq and nyse groups of exchanges as well as the box options exchange. In 2015, market regulation opened 6,455 reviews or investigations and 274 examinations. In addition, the department referred 471 matters to the securities and exchange commission. 4b) member regulation finra's member regulation department has a comprehensive examination program with dedicated resources of more than 1,100 employees. Staff from member regulation conduct regular and branch office examinations on a schedule that is established based on a risk-profile model. In addition, member regulation conducts reviews and targeted examinations based on investor complaints, referrals from other finra departments, terminations of brokerage employees for cause, arbitrations and referrals from other regulators. Member regulation also determines examination priorities and conducts special "sweeps" to target issues of immediate concern. In 2015, finra member regulation conducted nearly 2,400 regular and branch office examinations and over 7,000 targeted and sweep reviews and examinations. 4c) enforcement federal law gives finra the authority to discipline securities firms and individuals in the securities industry who violate the federal securities laws and rules as well as finra and municipal securities rulemaking board (msrb) rules. Through its enforcement and market regulation departments, finra brings disciplinary actions against firms and their employees that may result in sanctions, including censures, fines, suspensions and, in egregious cases, expulsions or bars from the industry. In appropriate cases, finra will require firms and individuals to provide restitution to harmed investors and often imposes other conditions on a firm's business to prevent repeated wrongdoing. In 2015, finra brought 1,512 disciplinary actions against registered individuals and firms and levied fines totaling more than $93 million. In addition, finra expelled 25 firms from the securities industry, suspended 1 firm, barred 492 individuals and suspended 737 brokers from association with finra-regulated firms. 4d) office of fraud detection and market intelligence finra's office of fraud detection and market intelligence (ofdmi) provides a heightened and expedited review of allegations of serious frauds, a centralized point of contact internally and externally on fraud issues, and consolidates recognized expertise in expedited fraud detection and investigation. This department is responsible for conducting insider-trading and fraud surveillance for all otc, otcbb, nasdaq-, nyse- and nyse mkt-listed issues across all u.s. Exchanges as well as conducting insider trading surveillance across all u.s. Options exchanges. In 2015, the insider trading surveillance, fraud surveillance, whistleblower and central review group units conducted investigations which resulted in more than 850 referrals to the sec, other federal or state regulatory or law enforcement agencies, or other internal finra departments. These referrals involved potential insider trading, microcap fraud, issuer fraud, ponzi-type schemes, elder financial abuse, anti-money laundering violations, or other potential violati”

“Other changes in net assets or fund balances primarily relate to any or all of the following: changes in net income/(loss), unrecognized employee benefit plan amounts and unrealized gain/(l0ss) on investments. For additional information please see the finra 2015 annual financial report which is available @ www.finra.org/about/annual-report-financials.”

“Form 1096 annual summary and transmittal of u.s. Information returns all contractor payments and applicable 1099's for finra regulation, inc. Were reported on form 1096 for finra regulation, inc.'s parent company, the financial industry regulatory authority.”

“On december 20, 2015, finra dispute resolution, inc. Was dissolved and merged into finra regulation, inc. Finra's office of dispute resolution operates the largest securities dispute resolution forum for investors, brokerage firms, and associated persons in the united states. It handles over 99 percent of securities-related arbitrations and a portion of the securities-related mediations in the united states. During 2015, the office of dispute resolution administered approximately 4,600 arbitrations and approximately 600 mediations through its network of four offices in new york, boca raton, chicago and los angeles. It conducts arbitrations and mediations in over 70 hearing locations.”