Both FINRA and the SEC are looking into potential violations committed by firms that utilize cash-sweep programs and whether proper disclosures are being made to their customers. Amy Lynch, FrontLine’s Founder and President, advises that firms now grappling with Regulation Best Interest may also want to review the disclosure requirements relevant to conflicts of interest with cash-sweep programs, as well as ensuring they are properly informing customers of all options with cash management. See IGNITES (subscription required), “Finra Probing Cash-Sweep Arrangements”
