MCG Compliance Team Scruitinizing Small Caps

FINRA & SEC Heighten Scrutiny of Small-Cap and Omnibus Accounts

Broker-Dealer, Compliance

In October 2025, U.S. securities regulators significantly intensified their focus on small-capitalization (small-cap) offerings, low-priced securities, and omnibus account activity, signaling elevated enforcement risk for broker-dealers and other financial institutions. FINRA’s targeted examination letter, issued in October 2025, reviews firm practices related to public and private offerings of exchange-listed issuers, particularly those with foreign operations,…

MCG Consulting Broker Dealers

SEC 2026 Examination Priorities: How MCG Consulting and Wolters Kluwer Help Firms Prepare

Broker-Dealer, Compliance

The SEC’s Fiscal Year 2026 Examination Priorities, released in November 2025, signal a continued shift toward risk-based, effectiveness-driven regulatory oversight. Examiners are focused on how compliance programs function in practice—particularly across complex products, AML and financial crime, books and records, and compliance training culture. For broker-dealers, investment advisers, and registered investment companies, aligning with these…

SEC Eases Use of Personal Entities for Broker Commissions

Broker-Dealer, Compliance

Posted on November 30, 2025 Written by: Maria Minguez, Sr.Consultant and Michael Dorsey, Sr. Consultant Good morning, fellow professionals in the independent financial services industry. As registered broker-dealers and representatives navigating an ever-evolving regulatory landscape, staying ahead of compliance updates is crucial for protecting your business and optimizing operations. Today, we’re excited to share a…

Trading floor

Is your AML framework fortified?: What you Need to Know to Protect your Firm

Compliance, FINRA

In the evolving landscape of financial regulation, broker-dealers face mounting pressure to fortify their anti-money laundering (AML) frameworks, particularly in trade surveillance. FINRA Regulatory Notice 21-03, issued on February 10, 2021, underscores the heightened risks associated with low-priced securities—often referred to as microcap or penny stocks—and the need for vigilant monitoring to detect potential fraud…

Navigating Conflicts in Due Diligence Under FINRA Notice 21-03: Implications You Should Know Now

Compliance, FINRA

FINRA Notice 21-03 highlights a critical intersection between anti-money laundering (AML) compliance and market integrity, particularly for firms active in underwriting, distributing, and trading low-priced or OTC securities. These markets, often characterized by limited transparency and heightened volatility, present increased risk of fraud, manipulation, and regulatory exposure. To remain compliant, firms must integrate AML-driven surveillance…

Business men watching stock growth on monitor

FINRA Targets Small-Cap Offerings: Immediate Action Needed from Financial Institutions

Compliance, Mutual Funds

In light of the Financial Industry Regulatory Authority’s (FINRA) ongoing targeted examination of practices surrounding public and private offerings of small-capitalization exchange-listed issuers with business operations in foreign jurisdictions—such as China—financial institutions must immediately prioritize a comprehensive self-assessment of their current public and private offering practices. This review, detailed in FINRA’s October 2025 guidance, focuses…

Outsourced Compliance for BSA/AML and OFAC

Compliance, Mutual Funds

The Compliance Burden in a High-Risk Environment In today’s regulatory landscape, financial institutions are under increasing pressure to remain compliant with a maze of laws and evolving global threats. At the center of this compliance framework are three pillars: the Bank Secrecy Act (BSA), Anti-Money Laundering (AML) regulations, and the Office of Foreign Assets Control…