www.ib-da.org
Unus pro omnibus, omnes pro uno
One for all, all for one
April 13, 2012

“WHY JOIN IBDA”

Good Morning Fellow Members,

Here at IBDA, the business of the Membership continues. Kindly note a newly created tab on our website, www.ib-da.org for Members to anonymously post their own FINRA War Stories in an effort to bring change.

With the same intent and spirit, please also note our latest report, entitled “Enlightened Regulation” presented to top FINRA management, at a round table discussion on March 23, 2012.

United we stand, divided we fall!

Please send your $100.00 Membership check, payable to IBDA, to PO Box 5335, Hauppauge, NY 11788 along with a business card and your email address. Thank you for your support.

Alan & Stephen
__________________________________________________________________

Here is the text of an email memorialization of the Round Table Discussion, held on March 23, 2012, sent to FINRA Executive Management.

“Thank you for traveling and inviting me to attend the Round Table discussion at the Long Island District Office on Friday, March 23, 2012.

“Once the participants overcame their fear, I felt the meeting was a very useful and valuable exchange of views on problems facing the Membership. I had hoped to remain silent until my turn. However, when I sensed the meeting turning towards individual issues, I felt we stood to lose a valuable opportunity and spoke up.

“Please note my enumerated recommendations for your consideration:

1. FINRA communications to the Membership need to be more closely controlled. “Less is more.” Surveys should be sent to the Membership rarely, rather than every time a supervisor changes. They should be concise, user friendly, voluntary and not be implemented when information is readily available at the time of an audit.

Further, they should be reviewed, prior to being sent by a sampling of small firm Members as to their format, content and potential effectiveness.

2. FINRA cannot be all things to all people. FINRA needs to redeploy its limited assets to focus on fraud which has created the greatest damage for the Public and perceptions of our industry.

At the same time, FINRA needs to refocus its audit procedures on potential fraud and customer damage issues. Technical violations, not creating customer damage should be downplayed and written up to provide the firm an opportunity to correct, without punitive action.

In this light, FINRA should be enlisting the assistance of the Membership, by emphasizing the highly successful Whistleblower program, suggested by me when I ran for the NAC.

Contrary to erroneous Congressional perceptions, the Members seek fair and balanced markets which are good for business.

3. Wherever possible, future educational meetings should be held at FINRA offices thereby lowering costs. As a tradeoff, to encourage higher participation, higher attendance. Notes and or a cd should be automatically sent to all Members so everyone is on the same page.

Any enhancement in participation should produce the same in results while providing the Membership with a service absent higher costs. The notes should be available through a 24 hour online library created for this purpose.

In this light, FINRA should be enlisting the assistance of the Membership, by emphasizing the highly successful Whistleblower program, suggested by me when I ran for the NAC.

4. Rule 1017 needs a major overhaul because it is stifling competition and entrepreneurship in violation of Congressional and SEC guidelines.

All firms are not the same. We need to distinguish between the compliant firms and the problem ones. The limited Regulatory assets of FINRA need to be applied with different degrees of regulation for clean and non-compliant firms. Specifically, a clean firm seeking to expand their business with qualified participants should be granted an almost immediate approval to they can proceed with the Publics’ business.

On the other hand, a troubling firm is worthy of a slower and more deliberate process.

5. Wherever possible, future educational meetings should be held at FINRA offices thereby lowering costs. As a tradeoff to achieve higher participation, meeting notes and or a co should be automatically sent to all Members so everyone is on the same, higher regulatory page.

6. A twenty-four hour online library should be available to the Membership to access these learned documents.

7. FINRA has done some good things which need to be emphasized. Namely, Global Relay archiving and other pending related services at low costs. Also the Continuing Ed “E” Learning library, at low cost.

8. FINRA needs to address the sharp decline in Membership. A good start would be to ask firms when they resign why. FINRA is losing 1 ½ firms every week. This trend has continued for some time with Membership down 570 firms in the past five years and down 21 for the first months of 2012.

“Based upon numerous contacts across the country, I believe this review would demonstrate that Members are resigning because they are caught in a profit squeeze between higher costs and onerous regulatory burdens.

“One solution would be to tie compensation of top FINRA managers to the number of firms. For example, with 20% fewer firms, FINRA managers should receive 20% less. If the SEC wants additional programs let them go back to Congress and seek a taxpayer increase to cover the cost of their special interest program. Thank you for your support.”

Alan & Stephen

Alan Davidson, CEO                                                                                Stephen Kohn, President
Email: alan@ib-da.org                                                                           Email: stephen@ib-da.org