FINRA Targets 'Game-Like' Digital Platforms

from ThinkAdvisor

February 03, 2021by Smarsh

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"FINRA highlights the need to inspect for outside business activities (OBA), which is significant given the recent news surrounding GameStop."

-- Robert Cruz, Vice President, Information Governance - for ThinkAdvisor

The Financial Industry Regulatory Authority is warning broker-dealers to be wary of digital platforms with interactive and “game-like” features, as they could run afoul of the regulator’s Communications With the Public rule when using them.

In its just-released 2021 Examinations and Priorities report — which summarizes exam findings from 2020 — FINRA points out that there was “a surge in new retail investors entering the markets via online brokers” last year.

Some “online broker-dealers’ apps, as well as those offered by other financial services and consumer-oriented businesses, include interactive and ‘game-like’ features, as well as related forms of advertising and marketing,” FINRA explained.

These features “affect many aspects of how firms interact and communicate with customers, from initial advertisements through the opening of accounts, recommendations and the presentation of different investment choices,” it said.

The FINRA report notes that it found broker-dealers that had failed to supervise and maintain policies and procedures for digital communications.

Visit ThinkAdvisor for the full article.

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