Released on February 1, the Financial Industry Regulatory Authority (FINRA) 2021 Report on its Examination and Risk Monitoring Program (Report) provides a roadmap for member firms to use to prepare for examinations and to review and assess compliance and supervisory procedures related to business practices, compliance, and operations. The Report replaces two of FINRA’s prior annual publications: (1) the Report on Examination Findings and Observations, which provided an analysis of prior examination results, and (2) the Risk Monitoring and Examination Program Priorities Letter, which highlighted areas FINRA planned to review in the coming year.
Recent changes to Chinese law have broad implications on cross-border data transfer in the course of investigations conducted by non-Chinese regulators. Clients work closely with counsel to navigate potential legal landmines in any defense of an investigation involving data from China.
Just over six months ago, on March 24, 2020, the People’s Republic of China’s (PRC) revised Securities Law (revised on December 28, 2019) (中华⼈民共和国证券法（2019年修订) went into effect. While the revised Securities Law affects many aspects of China’s securities law framework (including the registration of new securities for initial public offerings, disclosure requirements, and investor protection rules), a new “blocking” provision is particularly notable. Specifically, Article 177 of the revised Securities Law prohibits non-Chinese securities regulators from conducting investigations within China and prevents Chinese individuals and entities from providing information to such regulators without first receiving approval from the China Securities Regulatory Commission and/or other competent departments under the State Council.