FINRA REMINDS FIRMS OF THEIR SALES PRACTICE OBLIGATIONS FOR ALTERNATIVE MUTUAL FUNDS
FINRA has issued Regulatory Notice 22-11 reminding firms of their Sales Practices obligations for Alternative Mutual Funds. The Notice outlines examination findings and enforcement action taken by FINRA against several firms for failing to establish and maintain appropriate supervisory systems for recommendations of alternative mutual funds. The Notice summarizes effective practices found at some member firms and highlights FINRA’s expectations in this regard. Finally, it also includes some key questions for consideration that Dealers can use as a guideline to evaluate whether their supervisory system is adequately designed to address the unique characteristics of these products. This Notice will be of interest and instructive to all Canadian Dealers that have Alternative Products on their approved product list.