2021-11-15T11:01:43-06:00 2020-12-31 346565596 ERNST & YOUNG US LLP 221 E 4th Street Suite 2900 Cincinnati OH 45202 990 2020-01-01 521959501 FINRA REGULATION INC FINR 2027288949 9509 KEY WEST AVENUE ROCKVILLE MD 20850 ROBERT A RENNER SR VICE PRESIDENT 2021-11-15 true ROBERT A RENNER 999009999 Julie L Sparks P01268401 5136121400 2020-11-12 2020 2022-09-23 18:48:47Z ROBERT W COOK 1735 K STREET NW WASHINGTON DC 200061506 964459237 false X WWW.FINRA.ORG/rules-guidance/rulebooks/corporate-organization/ii.finra-regulation-inc X 1996 DE FINRA REGULATION IS DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY THROUGH EFFECTIVE AND EFFICIENT REGULATION OF THE SECURITIES INDUSTRY. 11 10 0 1 29880 7395 0 0 805258766 964396404 0 0 113920 62833 805372686 964459237 438242 786429 0 0 0 0 0 0 0 664666073 633848047 665104315 634634476 140268371 329824761 31398219 68166800 138416296 131853072 -107018077 -63686272 FINRA REGULATION IS DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY THROUGH EFFECTIVE AND EFFICIENT REGULATION OF THE SECURITIES INDUSTRY. false false SEE SCHEDULE O 0 false false false false false false false false false false false false false false true false true false false false false false false false false false true false true false false false false false false false false false false false true false false true X 0 0 0 true true false false false false false true false X 11 10 false false false false true true true true true false false true true true true true true false false false CA X MARCIA E ASQUITH 2027288949 1735 K STREET NW WASHINGTON DC 20006 Robert W Cook President & CEO 60.0 0.0 X X 0 2546014 573549 Brian J Kovack Regulatory Policy Committee 2.0 2.0 X 0 90206 0 Charles I Plosser Regulatory Policy Committee 2.0 2.0 X 0 90624 0 Elisse B Walter Chair, REG POLICY COMMITTEE THRU 8/20 3.0 2.0 X 0 76308 0 Ethiopis Tafara Regulatory Policy Committee 2.0 2.0 X 0 624 0 Hillary A Sale Chair, Reg Policy CommITTEE AS OF 8/20 2.0 2.0 X 0 95624 0 John B Ehnes Regulatory Policy Committee 2.0 2.0 X 0 100624 0 Joshua S Levine Reg Policy Committee THRU 8/20 2.0 2.0 X 0 76183 0 Kathleen A Murphy Regulatory Policy Committee 2.0 2.0 X 0 100624 0 Maureen Jensen Regulatory Policy Committee 2.0 2.0 X 0 45516 0 Paige W Pierce REGULATORY POLICY COMMITTEE 2.0 2.0 X 0 90624 0 Peter R Fisher Regulatory Policy Committee 2.0 2.0 X 0 90624 0 Stephen A Kohn Reg Policy Committee THRU 8/20 2.0 2.0 X 0 68378 0 Susan Wolburgh Jenah Reg Policy CommITTEE THRU 8/20 2.0 2.0 X 0 76312 0 Timothy C Scheve Regulatory Policy Committee 2.0 2.0 X 0 95624 0 William H Heyman Reg Policy Committee THRU 8/20 2.0 3.0 X 0 111267 0 Bari M Havlik Executive Vice President 60.0 0.0 X 0 1140073 172788 Marcia E Asquith EVP, Board & External Relations 0.0 0.0 X 0 844170 252546 Richard W Berry Exective Vice President 60.0 0.0 X 0 677410 407399 Robert LD Colby EVP And Chief Legal Officer 60.0 0.0 X 0 1193369 49662 Thomas R Gira Executive Vice President 60.0 0.0 X 0 870774 626307 Todd T Diganci Executive Vice President/CFAO 60.0 0.0 X 0 1632643 99982 Derek W Linden Executive Vice President 0.0 60.0 X 0 745187 -54730 Jonathan S Sokobin Senior Vice President 0.0 60.0 X 0 595433 140854 Stephen M Schoeneman Senior Vice President 0.0 60.0 X 0 870162 25484 Steven J Randich Executive Vice President & CIO 0.0 60.0 X 0 1478133 176534 Susan M Schroeder Executive Vice President 0.0 0.0 X 0 278945 2635 Thomas M Selman Executive Vice President 0.0 60.0 X 0 2427700 26338 0 16509175 2499348 0 true true false Financial Industry Regulatory Authority 1735 K Street NW Washington DC 20006 MANAGEMENT/ADMIN 450627929 1 0 0 0 0 0 0 0 0 Regulatory Fees 900099 613418100 613418100 0 0 User Fees 900099 191293455 191263575 29880 0 Contract Service Fees 900099 73536943 73536943 0 0 Fines 900099 57024741 57024741 0 0 Dispute resolution fees 900099 29123165 29123165 0 0 0 0 0 0 964396404 0 0 0 0 0 0 0 0 62833 0 0 62833 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 964459237 964366524 29880 62833 786429 0 0 0 0 0 0 0 0 0 450627929 3863 138125 0 0 0 27296295 14020 1561268 1539849 0 35355529 1703428 0 543654 0 0 0 0 Overhead Allocation 105772413 Temporary Help 3796273 Bad Debt 5098035 Publications and Printing 310353 87013 634634476 0 0 0 0 0 0 31398219 68166800 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 31398219 68166800 78273706 73167915 0 0 60142590 58685157 0 0 0 0 0 0 0 0 0 0 0 0 138416296 131853072 0 0 0 0 X 12592800 12592800 50000000 50000000 -169610877 -126279072 -107018077 -63686272 31398219 68166800 X 329824761 -286492956 X false true X true false 0 X Schedule D, Part X, Line 2 FIN 48 (ASC 740) footnote U.S. GAAP PROVIDES A TWO-STEP APPROACH FOR EVALUATING TAX POSITIONS. RECOGNITION (STEP 1) OCCURS WHEN AN ENTITY CONCLUDES THAT A TAX POSITION, BASED SOLELY ON ITS TECHNICAL MERITS, IS MORE LIKELY THAN NOT TO BE SUSTAINED UPON EXAMINATION. MEASUREMENT (STEP 2) OCCURS WHEN THE TAX BENEFIT IS MEASURED AS THE LARGEST AMOUNT OF BENEFIT, DETERMINED ON A CUMULATIVE PROBABILITY BASIS, THAT IS MORE LIKELY THAN NOT TO BE REALIZED UPON ULTIMATE SETTLEMENT. FROM 2017 THROUGH 2020, THE YEARS MANAGEMENT CONSIDERS TO BE OPEN FOR EXAMINATION BY TAXING AUTHORITIES, MANAGEMENT DID NOT IDENTIFY THE EXISTENCE OF ANY UNCERTAIN TAX POSITIONS. true AMERICA ONLINE GIVING 220 MAIN ST SAFETY HARBOR FL 34695 810739440 501(C)(3) 450769 0 N/A N/A GENERAL SUPPORT ASECA 2101 L STREET WASHINGTON DC 20037 223036796 501(C)(3) 5500 0 N/A N/A GENERAL SUPPORT CONSUMER FEDERATION OF AMERICA 1620 EYE STREET WASHINGTON DC 20006 520880625 501(C)(3) 13000 0 N/A N/A GENERAL SUPPORT HASTINGS GROUP 2424 N 16TH STREET ARLINGTON VA 22201 541609182 501(C)(3) 10000 0 N/A N/A GENERAL SUPPORT JUMPSTART COALITION 919 18TH STREET NW WASHINGTON DC 20006 522031287 501(C)(3) 15000 0 N/A N/A GENERAL SUPPORT SEC HISTORICAL SOCIETY 1001 PENN AVE WASHINGTON DC 20004 522213646 501(C)(3) 10000 0 N/A N/A GENERAL SUPPORT SIFMA FOUNDATION FOR INVESTOR EDUCATION 120 BROADWAY NEW YORK NY 10271 521087193 501(C)(3) 30000 0 N/A N/A GENERAL SUPPORT UNIVERSITY OF PENNSYLVANIA 3254 STEINBERG HALL PHILADELPHIA PA 19104 231352685 501(C)(3) 10000 0 N/A N/A GENERAL SUPPORT FINRA INVESTOR EDUCATION FOUNDATION INC 9509 KEY WEST AVENUE ROCKVILLE MD 20850 200863779 501(C)(4) 188054 0 N/A N/A GENERAL SUPPORT 8 1 Schedule I, Part I VOLUNTARY DISCLOSURE FOR THE SIFMA FOUNDATION FOR INVESTOR EDUCATION CONTRIBUTION DURING 2020: TODD T. DIGANCI, FINRA AND FINRA REGULATION EXECUTIVE VICE PRESIDENT & CFAO, SERVED AS A BOARD MEMBER OF THE SIFMA FOUNDATION FOR INVESTOR EDUCATION. THE DONATIONS MADE TO AMERICAN ONLINE GIVING REPRESENTS THE EMPLOYER MATCH FOR FINRA'S WORKPLACE GIVING CAMPAIGN. FINRA REGULATION, INC. CONTRIBUTED DISGORGEMENT AWARDS RESULTING FROM REGULATORY FINES TO THE FINRA INVESTOR EDUCATION FOUNDATION. THESE DISGORGEMENTS, IN THE AMOUNT OF $188,054 WERE EARMARKED BY FINRA REGULATION, INC. FOR THE INVESTOR EDUCATION FOUNDATION (THE FOUNDATION), FOR PROGRAMS AND PROJECTS CONSISTENT WITH THE FOUNDATION'S MISSION. THE FOUNDATION IS A TAX-EXEMPT ORGANIZATION UNDER SECTION 501(C)(4) AND ITS MISSION IS TO PROVIDE UNDERSERVED AMERICANS WITH THE KNOWLEDGE, SKILLS AND TOOLS NECESSARY FOR FINANCIAL SUCCESS. THE FINRA INVESTOR EDUCATION FOUNDATION BOARD IS RESPONSIBLE FOR APPROVING AND MONITORING GRANTS. SEE THE FOUNDATION'S FORM 990 FOR ADDITIONAL DETAILS ON THE GRANT APPROVAL AND MONITORING PROCESS. Schedule I, Part I, Line 2 Procedures for monitoring use of grant funds. FORM 990, SCHEDULE I, PART I, LINE 2 OVERSIGHT AND RECORDKEEPING OF CONTRIBUTIONS CHARITABLE CONTRIBUTIONS ARE REVIEWED AND APPROVED BY THE APPROPRIATE BUSINESS UNIT HEAD (OR THEIR DESIGNEE). THE ORGANIZATION MAINTAINS RECORDS TO SUBSTANTIATE THE AMOUNT AND THE PURPOSE OF THE CHARITABLE CONTRIBUTIONS. true true false Robert W Cook President & CEO 0 1018902 0 1500000 0 27112 0 537070 0 36479 0 3119563 0 0 Susan M Schroeder Executive Vice President 0 7316 0 0 0 271629 0 413 0 2222 0 281580 0 0 Marcia E Asquith EVP, Board & External Relations 0 378451 0 425000 0 40719 0 221941 0 30605 0 1096716 0 0 Richard W Berry Exective Vice President 0 333491 0 320000 0 23919 0 364155 0 43244 0 1084809 0 0 Robert LD Colby EVP And Chief Legal Officer 0 503757 0 545000 0 144612 0 37050 0 12612 0 1243031 0 0 Todd T Diganci Executive Vice President/CFAO 0 604203 0 700000 0 328440 0 46071 0 53911 0 1732625 0 256250 Thomas R Gira Executive Vice President 0 218603 0 480000 0 172171 0 613636 0 12671 0 1497081 0 0 Bari M Havlik Executive Vice President 0 510009 0 625000 0 5064 0 143722 0 29066 0 1312861 0 0 Steven J Randich Executive Vice President & CIO 0 502280 0 650000 0 325853 0 147989 0 28545 0 1654667 0 287671 Stephen M Schoeneman Senior Vice President 0 38115 0 265000 0 567047 0 7084 0 18400 0 895646 0 221106 Thomas M Selman Executive Vice President 0 45900 0 347000 0 2034800 0 9262 0 17076 0 2454038 0 594257 Jonathan S Sokobin Senior Vice President 0 312709 0 260000 0 22724 0 89136 0 51718 0 736287 0 0 Derek W Linden Executive Vice President 0 372157 0 355000 0 18030 0 -86435 0 31705 0 690457 0 0 Schedule J, Part I, Line 3 Arrangement used to establish the top management official's compensation FINRA REGULATION IS A WHOLLY-CONTROLLED SUBSIDIARY OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA). AS THE PARENT ORGANIZATION, FINRA INCURS ALL DIRECT AND INDIRECT EXPENSES, INCLUDING SALARY AND BENEFITS. COMPENSATION FOR THE CEO/EXECUTIVE DIRECTOR IS ESTABLISHED AT AND PAID BY THE PARENT ORGANIZATION. FOR FURTHER DETAILS REGARDING COMPENSATION OF OFFICERS, PLEASE REFER TO THE 2020 RETURN OF ORGANIZATION EXEMPT FROM INCOME TAX - FORM 990 OF FINRA REGULATION'S PARENT ORGANIZATION, THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. Schedule J, Part I, Line 4a Severance or change-of-control payment IN CONNECTION WITH THOMAS SELMAN'S SEPARATION FROM FINRA, HE WAS PAID $333,519 IN 2020. THIS AMOUNT IS REFLECTIVE OF HIS 24 YEARS OF SERVICE TO FINRA. THIS AMOUNT WAS REPORTED AS DEFERRED INCOME ON THE 2019 FORM 990. IN CONNECTION WITH STEPHEN SCHOENEMAN'S SEPARATION FROM FINRA, HE WAS PAID $221,106 IN 2020. THIS IS REFLECTIVE OF HIS 12 YEARS OF SERVICE TO FINRA. THIS AMOUNT WAS REPORTED AS DEFERRED INCOME ON THE 2019 FORM 990. Schedule J, Part I, Line 4b Supplemental nonqualified retirement plan FINRA OFFERS TWO NON-QUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS. ANNUAL INCREASES IN BENEFIT VALUE, CLIFF VESTING EVENTS, AND PAYOUT DIFFERENTIALS ARE TAXABLE IN THE YEAR IN WHICH THEY OCCUR AND ARE REPORTED IN COLUMN B(III) OF SCHEDULE J, PART II. UNVESTED BENEFIT AND CONTRIBUTION ACCRUALS ARE TAX DEFERRED AND ARE REPORTED IN COLUMN C OF SCHEDULE J, PART II. FINRA'S SUPPLEMENTAL DEFINED BENEFIT PLAN IS A NON-QUALIFIED DEFINED BENEFIT PLAN THAT IS PROVIDED TO MEMBERS OF A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES SUCH AS THOSE DESCRIBED UNDER 201(2), 301(A)(3), AND 401(A)(1) OF ERISA. IT IS A FINRA FUNDED PLAN IN WHICH PARTICIPANTS TYPICALLY HAD A ONE-TIME CLIFF VESTING EVENT AT A SPECIFIED MILESTONE BASED ON BOTH AGE AND YEARS OF SERVICE. THIS PLAN WAS CLOSED TO NEW ENTRANTS AS OF 12/31/05. ALL PARTICIPANTS HAVE COMPLETED VESTING. PARTICIPANTS IN THE SUPPLEMENTAL DEFINED BENEFIT PLAN WHO RECEIVED A PAYOUT IN 2020 INCLUDE: THOMAS SELMAN - $1,679,696. THIS AMOUNT IS REFLECTIVE OF HIS 24 YEARS OF SERVICE TO FINRA. THE AMOUNTS BELOW, IF ANY, REPRESENT THE ACCUMULATED BENEFITS RECOGNIZED IN THE CURRENT YEAR FOR FEDERAL INCOME TAX PURPOSES UPON THE INDIVIDUALS' SEPARATION FROM FINRA AND THE PLAN. THE BENEFITS WERE EARNED WITHIN THE NON-QUALIFIED DEFINED BENEFIT PLAN OVER THE DURATION OF THE INDIVIDUALS' YEARS OF SERVICE TO FINRA. THESE AMOUNTS VARY BY INDIVIDUAL BASED ON YEARS OF SERVICE, COMPENSATION LEVELS AND PAY GRADE, AGE AT SEPARATION, AND PREVIOUS VESTING EVENTS. PARTICIPANTS IN THE NON-QUALIFIED DEFINED BENEFIT PLAN WHO HAD ACCULULATED BENEFITS RECOGNIZED IN 2020 INCLUDE: SUSAN SCHROEDER -$51,092 FINRA'S SUPPLEMENTAL DEFINED CONTRIBUTION PLAN IS A NON-QUALIFIED PLAN THAT IS OPEN TO VICE PRESIDENTS AND ABOVE WITH AN ANNUAL BASE PAY ABOVE THE QUALIFIED LIMIT. IT IS A FINRA FUNDED PLAN WITH A 3 YEAR VESTING CYCLE WITH ANNUAL VESTING BEGINNING AT AGE 62. PARTICIPANTS IN THE SUPPLEMENTAL NON-QUALIFIED DEFINED CONTRIBUTION PLAN WITH CONTRIBUTIONS VESTING IN 2020 INCLUDE: ROBERT COLBY - $109,339 STEPHEN SCHOENEMAN - $56,669 PARTIFIPANTS IN THE SUPPLEMENTAL NON-QUALIFIED DEFINED CONTRIBUTION PLAN WITH PAYOUTS IN 2020 INCLUDE: THOMAS GIRA - $113,226 STEPHEN SCHOENEMAN - $262,316 SUSAN SCHROEDER - $195,496 VOLUNTARY COMPENSATION DISCLOSURE: ETHIOPIS TAFARA WAS A VOLUNTEER BOARD MEMBER IN 2020 AND DID NOT RECEIVE COMPENSATION FOR HIS SERVICE, HOWEVER, HE DID RECEIVE TAXABLE FRINGE BENEFITS AS REPORTED ON FORM 1099-NEC. VOLUNTARY DISCLOSURE FOR FINANCIAL INFORMATION FINRA REGULATION, INC. IS A WHOLLY-CONTROLLED SUBSIDIARY OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA). AS THE PARENT ORGANIZATION, FINRA INCURS ALL DIRECT AND INDIRECT EXPENSES, INCLUDING SALARY AND BENEFITS. THE FINANCIAL INFORMATION INCLUDED IN THIS FORM 990 IS PRESENTED ON A STAND-ALONE BASIS, REFLECTING ONLY THOSE AMOUNTS ALIGNED WITH THE PROGRAMS CONDUCTED UNDER THE GOVERNANCE OF THE FINRA REGULATION BOARD OF DIRECTORS. THE STATEMENTS AND SCHEDULES IN THIS FORM 990 DO NOT REPRESENT THE CONSOLIDATED RESULTS FOR FINRA AND ITS SUBSIDIARIES. THE 2020 FORM 990 SHOULD BE READ IN CONJUNCTION WITH FINRA'S 2020 ANNUAL FINANCIAL REPORT, WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORTS. SEE ALSO SEPARATE 2020 FORMS 990 FOR RELATED ENTITIES INCLUDING FINRA AND FINRA INVESTOR EDUCATION FOUNDATION. 4A) MARKET REGULATION FINRA REGULATION'S MARKET REGULATION DEPARTMENT OVERSEES AND REGULATES OVER-THE-COUNTER TRADING OF EXCHANGE-LISTED AND NON-EXCHANGE-LISTED SECURITIES, CORPORATE AND MUNICIPAL DEBT, ASSET-BACKED SECURITIES AND TREASURY SECURITIES FOR COMPLIANCE WITH FINRA AND MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULES AND FEDERAL SECURITIES LAWS. MARKET REGULATION ALSO PROVIDES REGULATORY SERVICES TO THE CBOE, MIAX, NASDAQ AND NYSE EXCHANGE GROUPS, AS WELL AS THE BOX OPTIONS EXCHANGE, AND THE INVESTORS EXCHANGE, THE LONG-TERM STOCK EXCHANGE AND THE MEMBERS EXCHANGE. IN 2020, MARKET REGULATION OPENED 5,074 REVIEWS OR INVESTIGATIONS AND 241 EXAMINATIONS. IN ADDITION, THE DEPARTMENT REFERRED 775 MATTERS TO THE SECURITIES AND EXCHANGE COMMISSION. 4B) MEMBER SUPERVISION FINRA REGULATION'S MEMBER SUPERVISION DEPARTMENT CONDUCTS REGULAR AND BRANCH OFFICE EXAMINATIONS OF ITS MEMBER FIRMS ON A SCHEDULE THAT IS ESTABLISHED BASED ON A RISK-PROFILE MODEL. IN ADDITION, MEMBER SUPERVISION CONDUCTS REVIEWS AND TARGETED EXAMINATIONS BASED ON INVESTOR COMPLAINTS, REFERRALS FROM OTHER FINRA REGULATION DEPARTMENTS, TERMINATIONS OF BROKERAGE EMPLOYEES FOR CAUSE, ARBITRATIONS AND REFERRALS FROM OTHER REGULATORS. MEMBER REGULATION ALSO DETERMINES EXAMINATION PRIORITIES AND CONDUCTS SPECIAL "SWEEPS" OF ITS MEMBER FIRMS TO TARGET ISSUES OF IMMEDIATE CONCERN. IN 2020, MEMBER SUPERVISION CONDUCTED MORE THAN 7,300 EXAMINATIONS. 4C) ENFORCEMENT FINRA REGULATION DISCIPLINES SECURITIES FIRMS AND INDIVIDUALS IN THE SECURITIES INDUSTRY WHO VIOLATE THE FEDERAL SECURITIES LAWS AND RULES AS WELL AS FINRA AND MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULES. THROUGH ITS ENFORCEMENT DEPARTMENT, FINRA REGULATION BRINGS DISCIPLINARY ACTIONS AGAINST FIRMS AND THEIR EMPLOYEES THAT MAY RESULT IN SANCTIONS, INCLUDING CENSURES, FINES, SUSPENSIONS AND, IN EGREGIOUS CASES, EXPULSIONS OR BARS FROM THE INDUSTRY. IN APPROPRIATE CASES, FINRA REGULATION WILL REQUIRE FIRMS AND INDIVIDUALS TO PROVIDE RESTITUTION TO HARMED INVESTORS AND OFTEN IMPOSES OTHER CONDITIONS ON A FIRM'S BUSINESS TO PREVENT REPEATED WRONGDOING. IN 2020, FINRA REGULATION BROUGHT MORE THAN 900 NEW DISCIPLINARY ACTIONS AGAINST REGISTERED INDIVIDUALS AND FIRMS, LEVIED FINES TOTALING MORE THAN $57 MILLION AND ORDERED $25.2 MILLION IN RESTITUTION TO HARMED INVESTORS. IN ADDITION, FINRA REGULATION EXPELLED 2 FIRMS FROM THE SECURITIES INDUSTRY, BARRED 246 INDIVIDUALS AND SUSPENDED 375 BROKERS FROM ASSOCIATION WITH FINRA-REGULATED FIRMS. 4D) NATIONAL CAUSE AND FINANCIAL CRIMES DETECTION PROGRAMS FINRA REGULATION, INC.'S NATIONAL CAUSE AND FINANCIAL CRIMES DETECTION PROGRAMS PROVIDES A HEIGHTENED AND EXPEDITED REVIEW OF ALLEGATIONS OF SERIOUS FRAUD, SERVES AS A CENTRAL POINT OF CONTACT INTERNALLY AND EXTERNALLY ON FRAUD-RELATED ISSUES, AND CONSOLIDATES RECOGNIZED EXPERTISE IN EXPEDITED FRAUD DETECTION AND INVESTIGATION ACROSS SEVERAL UNITS. THIS DEPARTMENT INCLUDES A SURVILLANCE GROUP RESPONSIBLE FOR CONDUCTING CONSOLIDATED SURVEILLANCE OF POTENTIAL INSIDER-TRADING ACROSS ALL U.S. MARKETS AS WELL AS CONDUCTING SURVEILLANCE OF LISTED AND OVER-THE-COUNTER SECURITIES FOR POTENTIAL FRAUDULENT ACTIVITY. IN 2020, THE INSIDER TRADING SURVEILLANCE, FRAUD SURVEILLANCE, AND PIPES SURVEILLANCE TEAMS CONDUCTED INVESTIGATIONS THAT RESULTED IN MORE THAN 850 FORMAL REFERRALS TO THE SEC, OTHER FOREIGN, FEDERAL OR STATE REGULATORY OR LAW ENFORCEMENT AGENCIES, OR OTHER INTERNAL FINRA DEPARTMENTS. THESE REFERRALS INVOLVED POTENTIAL FRAUDULENT CONDUCT INCLUDING INSIDER TRADING, MICROCAP FRAUD SCHEMES, ISSUER FRAUD, THEFT BY PERSONS OUTSIDE FINRA'S JURISDICTION, PONZI-TYPE SCHEMES, AND OTHER POTENTIAL VIOLATIONS OF FEDERAL SECURITIES LAWS AND STATE SECURITIES REGULATIONS. THE DEPARTMENT ALSO INCLUDES THE NATIONAL CAUSE PROGRAM COMPRISED OF INVESTIGATIVE TEAMS AND THE INITIAL REVIEW GROUP, WHICH IS RESPONSIBLE FOR THE TRIAGE REVIEW OF TIPS, COMPLAINTS AND BROKER-DEALER FILINGS. NCP TEAMS PERFORM INVESTIGATIONS RELATED TO ALLEGATIONS OF FINRA RULES. IN 2020, THE IRG REVIEWED OVER 25,000 MEMBER FIRM FILINGS, INVESTOR COMPLAINTS, TIPS AND LITIGATION AND ARBITRATION-RELATED MATTERS FOR POTENTIAL FRAUD, THEFT, OR OTHER FINRA VIOLATIONS. IN ADDITION, THE IRG REVIEWED AND REFERRED over 830 MATTERS TO THE SEC, OTHER FOREIGN, FEDERAL OR STATE REGULATORY OR LAW ENFORCEMENT AGENCIES FOR,THEFT BY PERSONS OUTSIDE FINRA'S JURISDICTION, PONZI-TYPE SCHEMES, AND OTHER POTENTIAL VIOLATIONS OF FEDERAL SECURITIES LAWS, STATE SECURITIES REGULATIONS. 4E) REGISTRATION AND DISCLOSURE ANY PERSON ENGAGED IN THE SECURITIES BUSINESS OF A FIRM, INCLUDING PARTNERS, OFFICERS, DIRECTORS, BRANCH MANAGERS, DEPARTMENT SUPERVISORS AND SALESPERSONS MUST REGISTER WITH FINRA. THROUGH ITS REGISTRATION AND DISCLOSURE DEPARTMENT, FINRA REGULATION OPERATES CRD, THE CENTRAL LICENSING AND REGISTRATION SYSTEM FOR THE U.S. SECURITIES INDUSTRY AND ITS REGULATORS. FINRA REGULATION ALSO OPERATES THE INVESTMENT ADVISER REGISTRATION DEPOSITORY ON BEHALF OF THE SEC. THESE SYSTEMS CONTAIN THE REGISTRATION RECORDS OF MORE THAN 3,600 FINRA AND OTHER REGISTERED BROKER DEALERS AND MORE THAN 31,000 INVESTMENT ADVISERS, AS WELL AS THE QUALIFICATION, EMPLOYMENT, AND DISCLOSURE HISTORIES OF MORE THAN 617,000 ACTIVE REGISTERED INDIVIDUALS. FINRA REGULATION ALSO OPERATES THE BROKERCHECK PROGRAM, AN ONLINE SYSTEM FOR INVESTORS TO REVIEW THE BACKGROUNDS OF INVESTMENT PROFESSIONALS. BROKERCHECK CONTAINS RECORDS ON 1.1 MILLION CURRENT AND FORMER BROKERS AND OVER 20,700 CURRENT AND FORMER BROKER-DEALERS. 4F) OFFICE OF DISPUTE RESOLUTION FINRA REGULATION'S OFFICE OF DISPUTE RESOLUTION OPERATES A DISPUTE RESOLUTION FORUM FOR INVESTORS, BROKERAGE FIRMS AND THEIR REGISTERED EMPLOYEES, AND ADMINISTERS ARBITRATIONS AND MEDIATIONS THROUGH A NETWORK OF FOUR REGIONAL OFFICES, WITH 71 HEARING LOCATIONS INCLUDING ONE IN EACH STATE AND PUERTO RICO. IN 2020, THE OFFICE OF DISPUTE RESOLUTION ADMINISTERED 3,902 ARBITRATIONS AND 173 MEDIATIONS. Form 990, Part V, Line 15 EXCISE TAX FOR COVERED EMPLOYEES WAS REPORTED AND PAID BY FINRA REGULATION'S PARENT, THE FINANCIAL INDUSTRY REGULATORY AUTHORITY. Form 990, Part VI, Line 6 Classes of members or stockholders FINRA IS THE SOLE NOT-FOR-PROFIT STOCKHOLDER OF FINRA REGULATION, INC. Form 990, Part VI, Line 7a Members or stockholders electing members of governing body FINRA, THE SOLE NOT-FOR-PROFIT STOCKHOLDER, ELECTS ALL MEMBERS OF THE GOVERNING BODY. Form 990, Part VI, Line 7b Decisions requiring approval by members or stockholders FINRA, THE SOLE NOT-FOR-PROFIT STOCKHOLDER, RETAINS THE FOLLOWING AUTHORITY AND FUNCTIONS: 1) TO EXERCISE OVERALL RESPONSIBILITY FOR ENSURING THAT THE ASSOCIATION'S STATUTORY AND SELF-REGULATORY OBLIGATIONS AND FUNCTIONS ARE FULFILLED 2) TO DELEGATE AUTHORITY TO THE SUBSIDIARIES TO TAKE ACTIONS ON BEHALF OF THE ASSOCIATION. 3) TO ELECT THE SUBSIDIARY BOARDS OF DIRECTORS. 4) TO REVIEW THE RULEMAKING AND DISCIPLINARY DECISIONS OF THE SUBSIDIARIES 5) TO COORDINATE ACTIONS OF THE SUBSIDIARY BOARDS AS NECESSARY. 6) TO RESOLVE ANY DISPUTES AMONG THE SUBSIDIARIES. 7) TO ADMINISTER COMMON OVERHEAD AND TECHNOLOGY OF THE SUBSIDIARIES. 8) TO ADMINISTER THE OFFICE OF INTERNAL REVIEW AS PROVIDED IN THE ASSOCIATION'S BY-LAWS. 9) TO MANAGE EXTERNAL ASSOCIATION RELATIONS ON MAJOR POLICY ISSUES. 10) TO DIRECT THE SUBSIDIARIES TO TAKE ACTION NECESSARY TO EFFECTUATE THE PURPOSES AND FUNCTIONS OF THE ASSOCIATION. 11) TO TAKE ACTION AB INITIO IN AN AREA OF RESPONSIBILITY DELEGATED TO SUBSIDIARIES. Form 990, Part VI, Line 11b Review of form 990 by governing body THE FORM 990 WAS REVIEWED BY SENIOR MANAGEMENT AT VARIOUS STEPS THROUGHOUT THE PREPARATION CYCLE. THE AUDIT AND MANAGEMENT COMPENSATION COMMITTEES REVIEWED AND APPROVED THE ORGANIZATION'S 2020 FORM 990 BY UNANIMOUS WRITTEN CONSENT. THE BOARD WAS PROVIDED ACCESS TO THE FINAL FORM 990 FOR REVIEW (VIA A WEBSITE FOR BOARD MEMBERS ONLY) PRIOR TO FILING. Form 990, Part VI, Line 12c Conflict of interest policy THE ORGANIZATION HAS WRITTEN CONFLICT OF INTEREST POLICIES FOR BOARD MEMBERS AND OFFICERS. THE WRITTEN CONFLICT OF INTEREST POLICY FOR BOARD MEMBERS REQUIRES INITIAL DISCLOSURE OF INTERESTS THAT COULD GIVE RISE TO CONFLICTS AS WELL AS ANNUAL DISCLOSURE BY THE SAME BOARD MEMBERS. ADDITIONALLY, THE WRITTEN POLICY CONTAINS AN ONGOING OBLIGATION OF BOARD MEMBERS TO DISCLOSE POTENTIAL CONFLICTS OF INTEREST AS THEY ARISE Form 990, Part VI, Line 19 Required documents available to the public THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS AND THE FINRA CONSOLIDATED AUDITED FINANCIAL STATEMENTS AVAILABLE UPON REQUEST. Form 990, Part XI, Line 9 Other changes in net assets or fund balances OTHER CHANGES IN NET ASSETS OR FUND BALANCES PRIMARILY RELATE TO ANY OR ALL OF THE FOLLOWING: CHANGES IN NET ASSETS/LIABILITIES AND ELIMINATION OF INTERCOMPANY TRANSACTIONS. FOR ADDITIONAL INFORMATION PLEASE SEE THE FINRA 2020 ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORTS. - -XXX-XX-XXXX; FINANCIAL IND REGULATORY AUTHORITY INC 1735 K Street NW Washington DC 20006 530088710 REGULATORY DE 501(c)(6) na false FINRA INVESTOR EDUCATION FOUNDATION 1735 K Street NW Washington DC 20006 200863779 EDUCATION DE 501(c)(4) FINRA false HIGHVISTA DESIGNATED PORTFOLIO 200 Clarendon ST Boston MA 02116 824716807 Investment DE NA N/A false false false false false false false false false false false false false false false false false true false true false