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FINRA Sweep Letter Regarding Mutual Fun Both the 2015 and 2016 Financial Industry Regulatory Authority (“FINRA”) Examination Priorities Letters highlighted concerns regarding sales charge discounts and fee waivers. Many mutual funds waive their upfront sales charges for both retirement accounts and charities. However, FINRA has found that firms generally lack the automated controls necessary to flag mutual fund transactions for fee-waiver eligibility.
On May 18, 2016, FINRA issued a sweep letter that requests specific documents and information be provided to FINRA staff. Firms subject to the letter would need to deliver the information to FINRA on or before June 10, 2016. The request includes documents and information from the period of January 1, 2011 through December 31, 2015 (“relevant period”).
The specific information and documents requested in the FINRA sweep letter follow:
FINRA requests that, prior to providing a response to each question below, firms restate the relevant question in bold and italics.
Addendum A to the referenced sweep letter provides specific instructions on how to submit the requested information.
Please contact your ACA consultant or Dee Stafford in the Los Angeles office at (310) 322-8840 for more information regarding the implications of FINRA's Mutual Fund Waiver Sweep.