December 22, 2022

Continuing Focus on Complex Products: FINRA Provides Sweep Update on Supervision of Options Trading Accounts


Complex products continue to be a regulatory cause célèbre, drawing attention from the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority, Inc. (“FINRA”). FINRA launched a targeted examination of practices relating to options account opening, ongoing options account supervision and customer communications in connection with options in August 2021. Earlier this month, FINRA provided updated guidance in the form of questions for firms to consider as they review and evaluate their supervisory systems for options account activity of both self-directed and full service brokerage account customers. The questions focus on firms’ processes for approving customers to trade options, including related information gathering, options trading disclosures and ongoing supervision of options accounts.

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