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FINRA’s 2023 Examination and Risk Monitoring Program Report has created compliance uncertainty for many firms. BondWave’s Michael Ruvo, Paul Daley, and Matt Treter, CFA, discuss how firms can effectively address the regulator’s new focus on Fixed Income Fair Pricing.

Video Chapters:

00:00 Introduction and Agenda

01:26 BondWave Capabilities Overview

03:27 Three Main Points from the Fixed Income Fair Pricing Section of the 2023 Report on FINRA’s Examination and Risk Monitoring Program:

  • Fair pricing obligations outlined by FINRA and the MSRB apply to transactions in ALL securities – including fixed income
  • FINRA calculates a mark-up using prevailing market price (PMP) to determine if a price is fair
  • Member firms are required follow the regulatory prescribed method to continue down the “waterfall” to determine the PMP

05:24 FINRA Findings and Effective Practices from Past Examinations

08:06 Demonstration of Effi as an Effective Practice that can support the Rule using Prevailing Market Price (PMP)

08:47 PMP Documentation – Accessibility and Visibility in the Trade Oversight Module

14:13 Mark-Up Review Process for Exceptions that Require Action

18:21 Exception Handling and Trade Reporting with Trade Analysis and Trade Detail Reports

24:36 Q&A

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