Where have I been? My own private Idaho, I suppose. In reality, listening to good music (please check out our local band Tan Vampires) and stressing out about my workload. Back now to remind you of all this:

1. OpProf Registrations! New FAQ out answers many detailed questions about this new registration requirement. Remember that 11-33 introduced this new rule. What you want to do by the end of next week (by Oct 16) is to determine who at your firm fits into this complicated category of humans. Pretty much any registered senior manager who is actively engaged in the business and/or can commit your firm's capital or sign contracts (material stuff) will qualify. And anyone overseeing or authorizing the 'covered functions' listed in the rule. And your FINOP. It's complicated--I won't waste your time by reiterating everything in the rule, but I'll remind you to consider your IT professionals...even if they are outsourced. Yes, you might have to register them as OpProf's. Sorry.

Most folks you will designate as OpProfs will not have to take the new Series 99, because they will already hold a license that qualifies them for the opt-in registration... Series 4, 6, 7, 9/10, 14, 16, 17, 24, 26, 27, 28, 37 or 38, 51 and 53 all qualify for the opt-in. Even if someone held one of these exams within the last two years but doesn't currently have it registered--that's okay, but first register him in that capacity and the 99 is free (register that person as an OS when you reactivate the qualifying exam). 

Remember what's important here: 

• By next week, make a list of all your staff and other folks who do or supervise/authorize work listed as 'covered functions.' 
• Think hard about it: does the person really have authority?
• If so, include his name on your Day-One Professionals (D1P) list.
• Between Oct. 17 and Dec. 16, register each D1P on CRD as Operations Professionals ("OS" on the list). If the person already has a qualifying exam (see above), he will be all set... no fee, no test. If he doesn't have a qualifying exam, he will have until Oct. 17, 2012 to pass the Series 99 ($125 exam fee). He can continue to act in his current role during that time! And, if he sits for the exam during the first 60 days (by Dec 16, 2011), he can fail it and retake it once for free (one-time offer; must retake within 120 days; doesn't apply to those taking the test after the first 60 day period).
• If you decide after Dec. 16, 2011, that certain persons act in the OpProf capacity (new hires, new responsibilities, etc.), you'll register that person like usual and he'll have 120 days to pass the exam -- OR a qualifying exam (in which case, he gets 2 for 1). Such person can act in his new role as OpProf pending his OS registration.
• No, folks at your clearing firm do not register as OS with your firm.
• Yes, C/E reg element and broker-check now become a part of these OpProf's world...if they are brand new to registration with FINRA (pity them).
• You must register at least ONE person as OpProf.
• Here is the content outline for the new exam.

2. Don't forget about the new "internal conclusions" part of FINRA Rule 4530, which replaced NASD 3070. You must report violative behavior (serious stuff that jeopardizes the firm, its clients, the markets, or our collective human spirit) (okay, not the latter, but just seeing if you are reading carefully) to FINRA. Whistle-blowers unite!

3. You should by now be prepared to change your Fidelity Bond coverage to meet the new requirements effective Jan 1, 2012. I blogged about this. Check it out.

4. Did you add a procedure in your WSP about FCPA? Foreign Corrupt Practices Act? Why, you wonder, should I? Why is FINRA acting like it's going to police you on a law that's been around forever and that is so freakin' obvious in nature ("Don't bribe foreign officials or else!!!") and applies to so few dishonest people at such large, international firms? Don't ask me. They put a notice out on it, though. Yes they did.

5. Few random (more random?) things:

• FINRA Rule 2150 about sharing in customer accounts applies to accounts of any FINRA member, not just accounts of your firm. It's also construed to include investments in private offerings.  This is an important distinction and one that might be missed. Look at your procedures: is this made clear?
• FINRA's books and records rule changed. Now it's a handful of rules...check out FINRA 4511, 12, 13 and 14 and Notice 11-19. Effective 12-5-11. Your NAF's may require revision... signature lines for Reps and Supervisors; pre-dispute arbitration language. Do it.
• Assignment of responsibility for G/L accounts...you should have been doing this since August. Who has primary responsibility over the accounts? Who has supervisory resp.? Is there evidence of their monthly reviews?
• Market access rule (SEC): are you following it? Do you have controls in place? Remember, it doesn't just apply to naked access. (How much do we all love that word, naked? Especially in this very boring context? Just think, thanks to this word, my blog gets more action than it rightfully should.)
• OATS: let's not even talk about it. Please reference any one of the hundreds of automated emails you've gotten recently about OATS rules, specifications, industry calls, etc. I guess I'll be helpfully redundant by reminding you that OATS rules apply to all NMS stocks as of 10-17-11 and that the number to call for OATS help is 1-800-321-6273. You're welcome.
• Ditto for TRACE. Might I suggest visiting here for some information on trade reporting of asset-backed securities?
• Even if you are a tiny firm, do an office inspection in addition to your 3012 testing/verification every year. Two separate requirements; I've seen examiners give flack about this.
• If you are a trading firm and your customers have prime brokers that hold their accounts, get it in writing that they don't want you to send them stmts/confirms; you or your clearing firm can send them to the prime broker instead (under a no-action letter).
• Encrypt the info you give your FINRA examiner. Seems to me they should only demand that for customer information, but it seems they want all info encrypted. Don't ask me how--you know I'm IT illITerate. Some examiners are nice and will help you do it. Awe.

Lastly, I would like to express dismay over the waiver appeals process. Recent experience has shown that the group takes months and months to deliver decisions, thus eating up the entire exam window, and then renders unreasonable decisions. I don't like it. By contrast, the waiver department folks are pure awesomeness. Responsive, kind, and, when allowed to have discretion, reasonable.

Did I just end on a positive note? Wow, that's crazy. Must be the music I'm listening to. Kudos to Buoy for bringing really weird, sometimes really great, bands into my life.