Regulatory Outlook | 11.16.20
FINRA Launches Targeted Exam of Fund Fee Waivers
FINRA is conducting targeted exams of firms’ systems and procedures as it relates to providing mutual fund discounts or fee waivers to clients. The targeted exam letter was sent to small number of broker-dealer firms that were identified through a risk-based analysis, according to FINRA. The exams were prompted by a June 4 settlement with Merrill Lynch, in which FINRA ordered the firm to pay $7.2 million in restitution to customers who had not received Rights of Reinstatement, or RoR, related discounts or waivers. FINRA also has included a review of RoR discounts and waivers in some of its 2020 exams and believes a targeted exam is warranted to assess other firms’ practices.
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