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RECOGNITION (STEP 1) OCCURS WHEN AN ENTITY CONCLUDES THAT A TAX POSITION, BASED SOLELY ON ITS TECHNICAL MERITS, IS MORE LIKELY THAN NOT TO BE SUSTAINED UPON EXAMINATION. IN STEP 2 (MEASUREMENT), THE TAX BENEFIT IS MEASURED AS THE LARGEST AMOUNT OF BENEFIT, DETERMINED ON A CUMULATIVE PROBABILITY BASIS, THAT IS MORE LIKELY THAN NOT TO BE REALIZED UPON ULTIMATE SETTLEMENT. DURING THE YEARS FROM 2011 TO 2014, WHICH REPRESENT THE YEARS MANAGEMENT CONSIDERS TO BE OPEN FOR EXAMINATION BY TAXING AUTHORITIES, MANAGEMENT DID NOT IDENTIFY THE EXISTENCE OF ANY UNCERTAIN TAX POSITIONS. ACCORDINGLY, ALL TAX POSITIONS ARE RECOGNIZED AND MEASURED AT THEIR FULL BENEFIT IN THE CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS. true ADVOCATES FOR CHILDREN OF NEW YORK 151 WEST 30TH STREET NEW YORK NY 10001 112247307 501(C)(3) 10000 AWARDS DINNER AMERICAN ENDOWMENT FOUNDATION 1521 GEORGETOWN ROAD HUDSON OH 44236 341747398 501(C)(3) 75192 2014 CONTRIBUTION APPLESEED FOUNDATION INC 727 15TH STREETNW WASHINGTON DC 20005 521835698 501(C)(3) 10000 AWARDS DINNER CONSUMER FEDERATION OF AMERICA 1424 16TH STREET NW WASHINGTON DC 20036 520880625 501(C)(3) 30000 2014 CONTRIBUTION COUNCIL FOR ECONOMIC EDUCATION 122 E 42ND STREET NEW YORK NY 10168 131623848 501(C)(3) 25000 AWARDS DINNER EMPLOYEE BENEFIT RESEARCH INSTITUTE 1100 13TH STREET WASHINGTON DC 20005 521190398 501(C)(3) 34500 AWARDS DINNER JUMPSTART COALITION FOR PERSONAL LITERACY 919 18TH STREET NW WASHINGTON DC 20004 522031287 501(C)(3) 25000 AWARDS DINNER OPERATION HOPE 707 WILSHIRE BLVD LOS ANGELES CA 90017 930959834 501(C)(3) 10000 2014 CONTRIBUTION SEC HISTORICAL SOCIETY 1101 PENNSYLVANIA AVE WASHINGTON DC 20004 522213646 501(C)(3) 15000 AWARDS DINNER SIFMA INVESTOR EDUCATION FOUNDATION 120 BROADWAY NEW YORK NY 10271 521087193 501(C)(3) 15000 2014 CONTRIBUTION 10 Form 990, Schedule I VOLUNTARY DISCLOSURE FOR APPLESEED FOUNDATION CONTRIBUTION DURING 2014: RICHARY G. KETCHUM, FINRA CEO, SERVED AS A BOARD MEMBER OF THE APPLESEED FOUNDATION. THE DONATION MADE TO THE AMERICAN ENDOWMENT FOUNDATION REPRESENTS THE EMPLOYER MATCH FOR BENEVITY, FINRA REGULATION'S WORKPLACE GIVING CAMPAIGN. OVERSIGHT AND RECORDKEEPING OF CONTRIBUTIONS CHARITABLE CONTRIBUTIONS ARE REVIEWED AND APPROVED BY THE APPROPRIATE BUSINESS UNIT HEAD (OR THEIR DESIGNEE). THE ORGANIZATION MAINTAINS RECORDS TO SUBSTANTIATE THE AMOUNT AND THE PURPOSE OF THE CHARITABLE CONTRIBUTIONS. X X X X X true true true true false RICHARD G KETCHUM CEO 0 978762 0 1500000 0 334036 0 61388 0 19642 0 2893828 0 0 TODD T DIGANCI EXECUTIVE VP AND CFO 0 519039 0 680000 0 22472 0 40686 0 26572 0 1288769 0 0 MARCIA E ASQUITH SENIOR VP AND CORP SECRETARY 0 249420 0 280000 0 22895 0 78270 0 23828 0 654413 0 0 F GREGORY AHERN EXECUTIVE VICE PRESIDENT 0 391368 0 400000 0 171346 0 33050 0 31960 0 1027724 0 69334 SUSAN F AXELROD EXECUTIVE VICE PRESIDENT 423483 0 475000 0 20680 0 128527 0 48039 0 1095729 0 0 0 J BRADLEY BENNETT EXECUTIVE VICE PRESIDENT 417396 0 490000 0 21290 0 122758 0 5253 0 1056697 0 0 0 MARTIN P COLBURN EXECUTIVE VP AND CTO 0 0 0 0 0 141556 0 0 0 0 0 141556 0 0 ROBERT L D COLBY EVP & CHIEF LEGAL OFFICER 0 479574 0 510000 0 22731 0 139355 0 16206 0 1167866 0 0 CARLO DI FLORIO CHIEF RISK OFFICER 0 428278 0 435000 0 11361 0 123105 0 56216 0 1053960 0 0 LINDA D FIENBERG PRESIDENT - DISPUTE RESOLUTION 0 412315 0 360000 0 900573 0 502177 0 19518 0 2194583 0 0 THOMAS R GIRA EXECUTIVE VICE PRESIDENT 416683 0 475000 0 3543 0 81964 0 41543 0 1018733 0 0 0 TRACY B JOHNSON SENIOR VICE PRESIDENT 0 302918 0 260500 0 19130 0 79898 0 12244 0 674690 0 0 STEVEN A JOACHIM EXECUTIVE VICE PRESIDENT 0 370774 0 450000 0 29597 0 64761 0 43594 0 958726 0 0 DEREK W LINDEN EXECUTIVE VICE PRESIDENT 332893 0 345000 0 11068 0 53695 0 31350 0 774006 0 0 0 STEVEN J RANDICH EXECUTIVE VP & CIO 0 476800 0 525000 0 21508 0 141002 0 37803 0 1202113 0 0 STEPHEN M SCHOENEMAN SENIOR VICE PRESIDENT 0 318826 0 250000 0 21941 0 97805 0 30662 0 719234 0 0 THOMAS M SELMAN EXECUTIVE VICE PRESIDENT 336325 0 360000 0 22099 0 43398 0 27804 0 789626 0 0 0 JONATHAN J SOKOBIN SENIOR VICE PRESIDENT 0 251776 0 115000 0 44349 0 65847 0 36593 0 513565 0 0 GRACE B VOGEL EXECUTIVE VICE PRESIDENT 8679 0 500000 0 13162 0 4519 0 104 0 526464 0 0 0 CAMERON K FUNKHOUSER EXECUTIVE VICE PRESIDENT 349095 0 390000 0 45741 0 46604 0 28420 0 859860 0 0 0 GARY K LIEBOWITZ SENIOR VICE PRESIDENT 87347 0 175000 0 767397 0 191375 0 11756 0 1232875 0 0 0 CARLOTTA A ROMANO SENIOR VICE PRESIDENT 207613 0 280000 0 643768 0 405586 0 16096 0 1553063 0 0 0 DANIEL SIBEARS EXECUTIVE VICE PRESIDENT 369864 0 376500 0 25191 0 61968 0 42434 0 875957 0 0 0 MICHAEL SOLOMON SENIOR VICE PRESIDENT 302874 0 305000 0 183843 0 29500 0 30917 0 852134 0 0 0 SUPPLEMENTAL COMPENSATION INFORMATION FOR THE HIGHEST COMPENSATED EXECUTIVES, BASE SALARY AND INCENTIVE COMPENSATION (EARNED IN THE PRIOR YEAR) REPORTED IN COLUMNS B(i) AND B(ii) ARE INDEPENDENTLY DETERMINED AND APPROVED BY THE MANAGEMENT COMPENSATION COMMITTEE OF THE BOARD OF GOVERNORS. OTHER REPORTABLE COMPENSATION (COLUMN B(III)) IS LARGELY COMPOSED OF RETIREMENT VESTING AND/OR PAYOUT EVENTS FROM NON-QUALIFIED PLANS, AS WELL AS SEVERANCE OR SEPARATION PAYMENTS, IF APPLICABLE. FOR FURTHER DETAILS REGARDING HOW EXECUTIVE COMPENSATION IS ESTABLISHED, PLEASE REFER TO SCHEDULE O. SCHEDULE J, PART I, LINE 1 FIRST CLASS OR CHARTER TRAVEL: THE NEXT CABIN ABOVE ECONOMY IS ALLOWED FOR INTERNATIONAL TRAVEL TO AND FROM THE U.S., WHERE THE FLIGHT TIME IS OVER SIX HOURS DIRECT. IT IS ALSO ALLOWED FOR ALL TRAVEL FROM THE U.S. MAINLAND TO HAWAII AND FOR DIRECT FLIGHTS WITHIN EUROPE THAT ARE OVER FIVE HOURS IN DURATION. OTHERWISE, ECONOMY CLASS IS REQUIRED. REIMBURSEMENT TO BOARD MEMBERS FOR FIRST CLASS TRAVEL EXPENSES INCURRED WHILE ATTENDING BOARD AND CORPORATE COMMITTEE MEETINGS ON BEHALF OF FINRA, FINRA REGULATION, INC., AND FINRA DISPUTE RESOLUTION, INC. IS PERMITTED. TRAVEL FOR COMPANIONS: IN LIEU OF A WEEKEND TRIP HOME, EMPLOYEES WHO ARE ON EXTENDED STAY (I.E., AN OUT-OF-TOWN HOTEL STAY OF SIX CONSECUTIVE NIGHTS OR LONGER), AND WHERE A DIRECT FLIGHT IS TWO OR MORE HOURS FROM HOME, WILL HAVE THE OPTION TO INVITE A COMPANION TO THEIR WORK DESTINATION OR TRAVEL TO AN ALTERNATE LOCATION. HOWEVER, EMPLOYEES WILL ONLY BE REIMBURSED UP TO THE COST OF WHAT A COACH CLASS TICKET WOULD HAVE BEEN FOR THE EMPLOYEE TO TRAVEL HOME FOR THE WEEKEND. THE REIMBURSEMENT AMOUNT WILL BE A TAXABLE FRINGE BENEFIT TO THE EMPLOYEE, AND THE EMPLOYEE IS RESPONSIBLE FOR ALL TAXES. COMPANION WEEKEND TRAVEL MUST BE APPROVED BY THE EMPLOYEE'S SENIOR VICE PRESIDENT AND THE MANAGER OF CORPORATE TRAVEL SERVICES BEFORE THE TRIP. COMPANION MEALS, GROUND TRANSPORTATION AND AIRPORT PARKING ARE AT THE EMPLOYEE'S EXPENSE AND CANNOT BE CHARGED TO THE CORPORATE CREDIT CARD OR SUBMITTED FOR REIMBURSEMENT. WHEN COMPANIONS ARE INVITED ON BEHALF OF FINRA, FINRA REGULATION, AND FINRA DISPUTE RESOLUTION TO BOARD MEETINGS, THEIR AIRFARE IS REIMBURSABLE. HEALTH AND CLUB DUES: AS PART OF ITS WELLNESS PROGRAM, FINRA OFFERS SUBSIDIZED GYM MEMBERSHIPS TO EMPLOYEES OF FINRA AND SUBSIDIARIES AT CERTAIN LOCATIONS. ALSO, THE CEO'S CONTRACT PROVIDES FOR UP TO A MAXIMUM AMOUNT OF $20,000 EACH CALENDAR YEAR FOR ADMISSION FEES, DUES AND HOUSE CHARGES OF ONE CLUB IN EACH OF THE NEW YORK CITY AND WASHINGTON, D.C. METROPOLITAN AREAS TO BE USED FOR BUSINESS PURPOSES. EXECUTIVE HEALTH PLAN: THE EXECUTIVE HEALTH PLAN IS AVAILABLE TO FINRA STAFF AT A LEVEL OF EXECUTIVE VICE PRESIDENT AND ABOVE AND OTHER EMPLOYEES AS DESIGNATED BY THE CEO. THE EXECUTIVE HEALTH PLAN COVERS PROCEDURES RELATED TO THE DIAGNOSIS AND PREVENTION OF A MEDICAL CONDITION(S). THE FINRA EXECUTIVE HEALTH PLAN PROVIDES FOR ONE ASSESSMENT PER YEAR. TAX INDEMNIFICATION: GIFTS TO EMPLOYEES ARE CONSIDERED TAXABLE COMPENSATION UNDER THE IRS CODE. THE FAIR MARKET VALUE OF THE GIFT TO THE EMPLOYEE WILL BE INCLUDED AS WAGES ON THE EMPLOYEE'S W-2. IN GENERAL, IT IS FINRA'S PRACTICE TO "GROSS UP," OR ADJUST THE WAGES AND TAXES SO THAT THE TAX EFFECT OF RECEIVING A GIFT IS NEUTRAL TO THE EMPLOYEE. IT IS ALSO FINRA'S PRACTICE TO "GROSS-UP" EMPLOYEE RELOCATION EXPENSES, AS WELL AS FOOD AND LODGING EXPENSES INCURRED AS PART OF THE EXECUTIVE HEALTH PLAN. PERSONAL SERVICES: THE CEO'S CONTRACT PROVIDES FOR A CAR AND DRIVER IN BOTH NEW YORK CITY, NEW YORK AND WASHINGTON, D.C. TO BE USED FOR BUSINESS PURPOSES. THESE SERVICES, WHICH ARE USED PRINCIPALLY BY THE CEO, ARE USED BY OTHER FINRA EMPLOYEES FOR BUSINESS PURPOSES WHEN AVAILABLE. THE CEO'S CONTRACT ALSO PROVIDES FOR COSTS INCURRED RELATED TO PERSONAL FINANCIAL AND TAX COUNSELING, UP TO $20,000 PER CALENDAR YEAR, AS WELL AS SPOUSAL TRAVEL FOR CERTAIN BUSINESS-RELATED EVENTS. SCHEDULE J, PART I, LINES 3, 4A AND 4B SUPPLEMENTAL COMPENSATION INFORMATION LINE 3) COMPENSATION FOR THE CEO/EXECUTIVE DIRECTOR IS ESTABLISHED AT THE PARENT ORGANIZATION, THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. FOR FURTHER DETAILS REGARDING COMPENSATION OF OFFICERS, PLEASE REFER TO THE 2014 RETURN OF ORGANIZATION EXEMPT FROM INCOME TAX - FORM 990 FOR FINRA REGULATION'S PARENT ORGANIZATION, THE FINANCIAL INDUSTRY REGULATORY AUTHORITY. 4A) IN CONNECTION WITH MARTIN P. COLBURN'S SEPARATION FROM FINRA, HE WAS PAID $141,556 IN 2014. IN CONNECTION WITH LINDA D. FIENBERG'S SEPARATION FROM FINRA DISPUTE RESOLUTION, INC. SHE WAS PAID $26,521 IN 2014. IN CONNECTION WITH GARY K. LIEBOWITZ'S SEPARATION FROM FINRA REGULATION, INC., HE WAS PAID $197,256 IN 2014. IN CONNECTION WITH CARLOTTA A. ROMANO'S SEPARATION FROM FINRA REGULATION, INC. SHE WAS PAID $98,460 IN 2014. LINE 4B) FINRA OFFERS TWO NON-QUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS. ANNUAL INCREASES IN BENEFIT VALUE, CLIFF VESTING EVENTS, AND PAYOUT DIFFERENTIALS ARE TAXABLE IN THE YEAR IN WHICH THEY OCCUR AND ARE REPORTED IN COLUMN B(III) OF SCHEDULE J, PART II. UNVESTED BENEFIT AND CONTRIBUTION ACCRUALS ARE TAX DEFERRED AND ARE REPORTED IN COLUMN C OF SCHEDULE J, PART II. 1) FINRA'S SUPPLEMENTAL DEFINED BENEFIT PLAN IS A NON-QUALIFIED DEFINED BENEFIT PLAN THAT IS PROVIDED TO MEMBERS OF A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES SUCH AS THOSE DESCRIBED UNDER 201(2), 301(A)(3), AND 401(A)(1) OF ERISA. IT IS A FINRA FUNDED PLAN IN WHICH PARTICIPANTS TYPICALLY HAVE A TAXABLE ONE-TIME CLIFF VESTING EVENT AT A SPECIFIED MILESTONE BASED ON BOTH AGE AND YEARS OF SERVICE. THIS PLAN WAS CLOSED TO NEW ENTRANTS AS OF 12/31/05. PARTICIPANTS IN THE NON-QUALIFIED DEFINED BENEFIT PLAN THAT HAD A CLIFF VESTING EVENT IN 2014 INCLUDE: CAMERON FUNKHOUSER - $23,733 THE AMOUNTS BELOW REPRESENT THE ACCUMULATED BENEFITS RECOGNIZED IN THE CURRENT YEAR FOR FEDERAL INCOME TAX PURPOSES UPON THE INDIVIDUALS' SEPARATION FROM FINRA AND THE PLAN. THE BENEFITS WERE EARNED WITHIN THE NON-QUALIFIED DEFINED BENEFIT PLAN OVER THE DURATION OF THE INDIVIDUALS' YEARS OF SERVICE TO FINRA. THESE AMOUNTS VARY BY INDIVIDUAL BASED ON YEARS OF SERVICE (RANGING FROM 10-30 PLUS YEARS), COMPENSATION LEVELS AND PAY GRADE, AGE AT SEPARATION, AND PREVIOUS VESTING EVENTS. LINDA D. FIENBERG - $570,200 GARY LIEBOWITZ - $521,709 CARLOTTA ROMANO - $524,941 2) FINRA'S SUPPLEMENTAL DEFINED CONTRIBUTION PLAN IS A NON-QUALIFIED PLAN THAT IS OPEN TO VICE PRESIDENTS AND ABOVE WITH AN ANNUAL BASE PAY ABOVE THE QUALIFIED LIMIT. IT IS ONLY OPEN TO THOSE NOT PARTICIPATING IN THE CLOSED NON-QUALIFIED DEFINED BENEFIT PLAN DESCRIBED ABOVE. IT IS A FINRA FUNDED PLAN WITH A 3 YEAR VESTING CYCLE WITH ANNUAL VESTING BEGINNING AT AGE 62. PARTICIPANTS IN THE SUPPLEMENTAL NON-QUALIFIED DEFINED CONTRIBUTION PLAN WITH CONTRIBUTIONS VESTING IN 2014 INCLUDE: F. GREGORY AHERN - $159,200 RICHARD G. KETCHUM - $300,020 MICHAEL SOLOMON - $163,948 VOLUNTARY DISCLOSURE FOR FINANCIAL INFORMATION THE FINANCIAL INFORMATION INCLUDED IN THE FORM 990 IS PRESENTED ON A STAND-ALONE BASIS WITH ALL SIGNIFICANT INTERCOMPANY RECEIVABLE AND PAYABLE AMOUNTS ELIMINATED AND DOES NOT REPRESENT THE CONSOLIDATED RESULTS FOR FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA) AND ITS SUBSIDIARIES. THE FINANCIAL INFORMATION PRESENTED REFLECTS ESTIMATES OF OVERHEAD ALLOCATIONS. THE 2014 FORM 990 SHOULD BE READ IN CONNECTION WITH THE 2014 FINRA ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORTS-FINANCIALS. SEE ALSO SEPARATE 2014 FORM 990'S FOR RELATED ENTITIES, INCLUDING FINRA, FINRA DISPUTE RESOLUTION, INC., AND FINRA INVESTOR EDUCATION FOUNDATION. FORM 990, PART III, LINE 4 FINRA IS AN INDEPENDENT, NON-GOVERNMENTAL REGULATOR FOR ALL SECURITIES FIRMS DOING BUSINESS WITH THE PUBLIC IN THE UNITED STATES. THROUGH FINRA REGULATION, FINRA OVERSEES OVER 4,000 BROKERAGE FIRMS, ABOUT 163,000 BRANCH OFFICES AND ALMOST 638,000 REGISTERED SECURITIES REPRESENTATIVES. FINRA IS DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY THROUGH EFFECTIVE AND EFFICIENT REGULATION OF THE SECURITIES INDUSTRY. 4A) MARKET REGULATION FINRA'S MARKET REGULATION DEPARTMENT OVERSEES AND REGULATES OVER-THE-COUNTER TRADING OF EXCHANGE-LISTED AND NON-EXCHANGE-LISTED SECURITIES AND CORPORATE AND MUNICIPAL DEBT FOR COMPLIANCE WITH FINRA AND MUNICIPAL SECURITIES RULEMAKING (MSRB) AND FEDERAL SECURITIES LAWS. MARKET REGULATION ALSO PROVIDES REGULATORY SERVICES TO NASDAQ OMX, NASDAQ OMX PHLX, NASDAQ OMX BX, NYSE ARCA AND DIRECT EDGE. IN 2014, MARKET REGULATION OPENED 5,778 REVIEWS OR INVESTIGATIONS AND 211 EXAMINATIONS. IN ADDITION, THE DEPARTMENT REFERRED 372 MATTERS TO THE SECURITIES AND EXCHANGE COMMISSION. 4B) FINRA'S MEMBER REGULATION DEPARTMENT HAS A COMPREHENSIVE EXAMINATION PROGRAM WITH DEDICATED RESOURCES OF MORE THAN 1,100 EMPLOYEES. STAFF FROM MEMBER REGULATION CONDUCT REGULAR AND BRANCH OFFICE EXAMINATIONS ON A SCHEDULE THAT IS ESTABLISHED BASED ON A RISK-PROFILE MODEL. IN ADDITION, MEMBER REGULATION CONDUCTS REVIEWS AND TARGETED EXAMINATIONS BASED ON INVESTOR COMPLAINTS, REFERRALS FROM OTHER FINRA DEPARTMENTS, TERMINATIONS OF BROKERAGE EMPLOYEES FOR CAUSE, ARBITRATIONS AND REFERRALS FROM OTHER REGULATORS. MEMBER REGULATION ALSO DETERMINES EXAMINATION PRIORITIES AND CONDUCTS SPECIAL "SWEEPS" TO TARGET ISSUES OF IMMEDIATE CONCERN. IN 2014, FINRA MEMBER REGULATION CONDUCTED NEARLY 2,500 REGULAR AND BRANCH OFFICE EXAMINATIONS AND OVER 7,000 TARGETED AND SWEEP REVIEWS AND EXAMINATIONS. 4C) ENFORCEMENT FEDERAL LAW GIVES FINRA THE AUTHORITY TO DISCIPLINE SECURITIES FIRMS AND INDIVIDUALS IN THE SECURITIES INDUSTRY WHO VIOLATE THE FEDERAL SECURITIES LAWS AND RULES AS WELL AS FINRA AND MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) RULES. THROUGH ITS ENFORCEMENT AND MARKET REGULATION DEPARTMENTS, FINRA BRINGS DISCIPLINARY ACTIONS AGAINST FIRMS AND THEIR EMPLOYEES THAT MAY RESULT IN SANCTIONS INCLUDING CENSURES, FINES, SUSPENSIONS AND, IN EGREGIOUS CASES, EXPULSIONS OR BARS FROM THE INDUSTRY. IN APPROPRIATE CASES, FINRA WILL REQUIRE FIRMS AND INDIVIDUALS TO PROVIDE RESTITUTION TO HARMED INVESTORS AND OFTEN IMPOSES OTHER CONDITIONS ON A FIRM'S BUSINESS TO PREVENT REPEATED WRONGDOING. IN 2014, FINRA BROUGHT 1,397 DISCIPLINARY ACTIONS AGAINST REGISTERED INDIVIDUALS AND FIRMS AND LEVIED FINES TOTALING MORE THAN $134 MILLION. IN ADDITION, FINRA EXPELLED 18 FIRMS FROM THE SECURITIES INDUSTRY, SUSPENDED 5 FIRMS, BARRED 481 INDIVIDUALS AND SUSPENDED 705 BROKERS FROM ASSOCIATION WITH FINRA-REGULATED FIRMS. 4D) OFFICE OF FRAUD DETECTION AND MARKET INTELLIGENCE FINRA'S OFFICE OF FRAUD DETECTION AND MARKET INTELLIGENCE (OFDMI)PROVIDES A HEIGHTENED AND EXPEDITED REVIEW OF ALLEGATIONS OF SERIOUS FRAUDS, A CENTRALIZED POINT OF CONTACT INTERNALLY AND EXTERNALLY ON FRAUD ISSUES, AND CONSOLIDATES RECOGNIZED EXPERTISE IN EXPEDITED FRAUD DETECTION AND INVESTIGATION. IN ADDITION, THIS DEPARTMENT IS RESPONSIBLE FOR CONDUCTING INSIDER-TRADING AND FRAUD SURVEILLANCE FOR ALL OTC, NASDAQ-, NYSE AND NYSE AMEX-, LISTED ISSUES ACROSS ALL U.S. EXCHANGES. THE DEPARTMENT HOUSES THE CENTRAL REVIEW GROUP WHICH IS RESPONSIBLE FOR THE TRIAGE REVIEW OF COMPLAINTS AND BROKER-DEALER FILINGS. OFDMI ALSO OVERSEES FINRA'S WHISTLEBLOWER PROGRAM. IN 2014, THE CENTRAL REVIEW GROUP REVIEWED OVER 26,000 FILINGS, COMPLAINTS, TIPS AND ARBITRATION-RELATED MATTERS. THE INSIDER TRADING SURVEILLANCE, FRAUD SURVEILLANCE AND WHISTLEBLOWER UNITS CONDUCTED INVESTIGATIONS WHICH RESULTED IN OVER 725 REFERRALS TO THE SEC, OTHER FEDERAL AND STATE LAW ENFORCEMENT AGENCIES OR OTHER INTERNAL FINRA DEPARTMENTS. THESE REFERRALS INVOLVED INSIDER TRADING, MICROCAP FRAUD, PONZI-TYPE SCHEMES, ELDER FINANCIAL ABUSE, ANTI-MONEY LAUNDERING REQUIREMENTS OR OTHER POTENTIAL VIOLATIONS OF FEDERAL LAWS, STATE REGULATIONS OR FINRA RULES. 4E) REGISTRATION AND DISCLOSURE ANY PERSON ENGAGED IN THE SECURITIES BUSINESS OF THE FIRM INCLUDING PARTNERS, OFFICERS, DIRECTORS, BRANCH MANAGERS, DEPARTMENT SUPERVISORS AND SALESPERSONS MUST REGISTER WITH FINRA. THROUGH ITS REGISTRATION AND DISCLOSURE DEPARTMENT, FINRA OPERATES CRD, THE CENTRAL LICENSING AND REGISTRATION SYSTEM FOR THE U.S. SECURITIES INDUSTRY AND ITS REGULATORS. IT ALSO OPERATES THE INVESTMENT ADVISER REGISTRATION DEPOSITORY ON BEHALF OF THE SEC. THESE SYSTEMS CONTAIN THE REGISTRATION RECORDS OF MORE THAN 4,100 FINRA AND OTHER REGISTERED BROKER-DEALERS AND MORE THAN 29,000 INVESTMENT ADVISERS, AND THE QUALIFICATION, EMPLOYMENT, AND DISCLOSURE HISTORIES OF MORE THAN 638,000 ACTIVE REGISTERED INDIVIDUALS, MAKING IT ONE OF THE LARGEST AND MOST SOPHISTICATED ONLINE REGISTRATION AND REPORTING SYSTEMS. FINRA ALSO OPERATES THE BROKERCHECK PROGRAM, AN ONLINE SYSTEM FOR INVESTORS TO CHECK OUT THE BACKGROUNDS OF INVESTMENT PROFESSIONALS. BROKERCHECK CONTAINS RECORDS ON 1.28 MILLION CURRENT AND FORMER BROKERS AND OVER 20,000 CURRENT AND FORMER BROKER-DEALERS. FORM 990, PART VI, LINE 2 ROBERT L. D. COLBY AND GARY H. STERN HAD A BUSINESS RELATIONSHIP DURING 2014 AS THEY SERVED TOGETHER ON THE BOARD OF THE DEPOSITORY TRUST CLEARING CORPORATION. FORM 990, PART VI, LINE 6 FINRA IS THE SOLE NOT-FOR-PROFIT STOCKHOLDER OF FINRA REGULATION, INC. FORM 990, PART VI, LINE 7A FINRA, THE SOLE NOT-FOR-PROFIT STOCKHOLDER, ELECTS ALL MEMBERS OF THE GOVERNING BODY. FORM 990, PART VI, LINE 7B FINRA, THE SOLE NOT-FOR-PROFIT STOCKHOLDER, RETAINS THE FOLLOWING AUTHORITY AND FUNCTIONS: 1) TO EXERCISE OVERALL RESPONSIBILITY FOR ENSURING THAT THE ASSOCIATION'S STATUTORY AND SELF-REGULATORY OBLIGATIONS AND FUNCTIONS ARE FULFILLED. 2) TO DELEGATE AUTHORITY TO THE SUBSIDIARIES TO TAKE ACTIONS ON BEHALF OF THE ASSOCIATION. 3) TO ELECT THE SUBSIDIARY BOARDS OF DIRECTORS. 4) TO REVIEW THE RULEMAKING AND DISCIPLINARY DECISIONS OF THE SUBSIDIARIES. 5) TO COORDINATE ACTIONS OF THE SUBSIDIARY BOARDS AS NECESSARY. 6) TO RESOLVE ANY DISPUTES AMONG THE SUBSIDIARIES. 7) TO ADMINISTER COMMON OVERHEAD AND TECHNOLOGY OF THE SUBSIDIARIES. 8) TO ADMINISTER THE OFFICE OF INTERNAL REVIEW AS PROVIDED IN THE ASSOCIATION'S BY-LAWS. 9) TO MANAGE EXTERNAL ASSOCIATION RELATIONS ON MAJOR POLICY ISSUES. 10) TO DIRECT THE SUBSIDIARIES TO TAKE ACTION NECESSARY TO EFFECTUATE THE PURPOSES AND FUNCTIONS OF THE ASSOCIATION. 11) TO TAKE ACTION AB INITIO IN AN AREA OF RESPONSIBILITY DELEGATED TO SUBSIDIARIES. FORM 990, PART VI, LINE 11B THE FORM 990 WAS REVIEWED BY SENIOR MANAGEMENT AT VARIOUS STEPS THROUGHOUT THE PREPARATION CYCLE. THE AUDIT AND MANAGEMENT COMPENSATION COMMITTEES REVIEWED AND APPROVED THE ORGANIZATION'S 2014 FORM 990 ON NOVEMBER 3, 2015. THE BOARD WAS PROVIDED ACCESS TO THE FINAL FORM 990 FOR REVIEW (VIA A WEBSITE FOR BOARD MEMBERS ONLY) PRIOR TO FILING. FORM 990, PART VI, LINE 12C THE ORGANIZATION HAS WRITTEN CONFLICT OF INTEREST POLICIES FOR BOARD MEMBERS AND EMPLOYEES. THE WRITTEN CONFLICT OF INTEREST POLICY FOR BOARD MEMBERS REQUIRES INITIAL DISCLOSURE OF INTERESTS THAT COULD GIVE RISE TO CONFLICTS AS WELL AS ANNUAL DISCLOSURE BY THE SAME BOARD MEMBERS. ADDITIONALLY, THE WRITTEN POLICY CONTAINS AN ONGOING OBLIGATION OF BOARD MEMBERS TO DISCLOSE POTENTIAL CONFLICTS OF INTEREST AS THEY ARISE. FINRA'S CODE OF CONDUCT APPLIES TO ALL EMPLOYEES OF FINRA AND DEFINES THE EXPECTATION OF EVERYONE WHO ACTS ON FINRA'S BEHALF. THE CODE INCLUDES A WRITTEN CONFLICT OF INTEREST POLICY THAT PRECLUDES EMPLOYEES FROM HAVING A DIRECT OR INDIRECT INTEREST IN OR RELATIONSHIP WITH ANY ORGANIZATION WHERE THESE INTERESTS COULD CONCEIVABLY: A) HINDER FINRA'S OBJECTIVITY, INDEPENDENCE OR JUDGMENT OR CONDUCT IN CARRYING OUT FINRA'S RESPONSIBILITIES OR B) CREATE THE APPEARANCE OF A CONFLICT. EMPLOYEES HAVE AN ONGOING RESPONSIBILITY TO REPORT CONFLICTS UNDER THE CODE AND MUST CERTIFY COMPLIANCE WITH THE CODE OF CONDUCT WITHIN 30 DAYS OF HIRE AND ANNUALLY THEREAFTER. EMPLOYEES ARE REGULARLY REMINDED OF THE RESOURCES THAT ARE AVAILABLE WHEN THEY ARE UNSURE WHAT TO DO. IN ADDITION TO TALKING TO DEPARTMENTAL MANAGEMENT, EMPLOYEES CAN DISCUSS CONFLICT-RELATED CONCERNS WITH FINRA'S OFFICE OF GENERAL COUNSEL. IF THEY ARE UNCOMFORTABLE DISCLOSING AN ISSUE AND DISCLOSING THEIR IDENTITY, THEY CAN USE FINRA'S 24-HOUR ETHICSPOINT HOTLINE TO POSE QUESTIONS OR REPORT CONCERNS. FINRA'S WHISTLEBLOWER POLICY FORBIDS RETALIATION AGAINST EMPLOYEES WHO REPORT SUSPECTED MISCONDUCT IN GOOD FAITH, EVEN IF THE REPORT ULTIMATELY PROVES TO BE ERRONEOUS. FORM 990, PART VI, LINES 15A AND 15B THE MANAGEMENT COMPENSATION COMMITTEE OF THE FINRA BOARD OF GOVERNORS (THE "COMMITTEE") IS RESPONSIBLE FOR SETTING PAY FOR EXECUTIVES OF FINRA AND SUBSIDIARIES WHOSE TOTAL COMPENSATION, INCLUDING INCENTIVE COMPENSATION, MAY EXCEED $1 MILLION. THE COMMITTEE IS COMPRISED OF FOUR NON-EMPLOYEE, NON-SECURITIES INDUSTRY MEMBERS OF THE BOARD OF GOVERNORS. THE COMMITTEE MET ON JANUARY 30, 2014 AND FEBRUARY 12, 2014 TO ESTABLISH INCENTIVE COMPENSATION ATTRIBUTABLE TO THE PERFORMANCE OF SERVICES DURING CALENDAR YEAR 2013 AND TO ESTABLISH BASE SALARIES FOR CALENDAR YEAR 2014. AS A GENERAL POLICY, FINRA HAS DETERMINED ITS COMPETITIVE COMPENSATION POSITIONING SHOULD BE CONSIDERED AGAINST A BROAD SECTION OF FINANCIAL SERVICES/CAPITAL MARKET COMPANIES, AS THIS SECTOR IS THE MOST LIKELY FROM WHICH WE RECRUIT TALENT AND THAT WOULD RECRUIT TALENT AWAY FROM THE COMPANY. WE ALSO BENCHMARK AGAINST GENERAL INDUSTRY POSITIONS AND LAW DEPARTMENTS FOR JOBS THAT ARE NOT UNIQUE TO THE FINANCIAL SERVICES INDUSTRY. THE COMMITTEE ENGAGED MERCER, INC. ("MERCER"), A THIRD-PARTY COMPENSATION CONSULTANT, TO PREPARE A COMPENSATION STUDY FOR REVIEW AT THESE MEETINGS. IN DETERMINING A BENCHMARKING STRATEGY FOR KEY EXECUTIVES, FINANCIAL SERVICES ORGANIZATIONS (BROKER-DEALERS, INVESTMENT BANKS, FEDERAL RESERVE BANKS, COMMERCIAL BANKS, INSURANCE COMPANIES, EXCHANGES AND REGULATORS) WERE DETERMINED TO BE THE MOST RELEVANT GROUPS FOR COMPARISON PURPOSES. THE COMMITTEE AND MERCER ENGAGED IN SUBSTANTIAL RESEARCH AND CONSIDERATION OF THE FUNCTIONS AND OPERATIONS OF SEVERAL POTENTIAL COMPARATORS AS WELL AS GENERAL COMPETITIVE CONDITIONS. IN DETERMINING SPECIFIC SALARY AND INCENTIVE COMPENSATION LEVELS FOR OFFICERS AND KEY EMPLOYEES, MANAGEMENT AND THE COMMITTEE CONSIDER: 1) OPERATIONAL RESULTS 2) STRATEGIC INITIATIVES 3) FINANCIAL HEALTH/RESULTS 4) INDIVIDUAL PERFORMANCE 5) COMPETITIVE COMPENSATION LEVELS AS PREPARED BY MERCER, INC., A THIRD-PARTY COMPENSATION CONSULTANT THE COMMITTEE'S MINUTES OF THE JANUARY 30, 2014 AND FEBRUARY 12, 2014 MEETINGS WERE REVIEWED AND APPROVED AS ACCURATE AND COMPLETE FOLLOWING THE COMMITTEE'S APPROVAL OF THE SENIOR EXECUTIVE COMPENSATION PACKAGES. THE FULL BOARD FURTHER APPROVED THE 2013 INCENTIVE COMPENSATION OF THE CEO AT ITS MEETING ON FEBRUARY 12, 2014. ALL COMPENSATION COMMITTEE MEMBERS VOTED FOR THE PROPOSED LEVEL OF EXECUTIVE COMPENSATION. FORM 990, PART VI, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS AND THE FINRA CONSOLIDATED AUDITED FINANCIAL STATEMENTS AVAILABLE UPON REQUEST. FORM 990, PART VII, COLUMN B THE OFFICERS / KEY EMPLOYEES LISTED IN FORM 990, PART VII, DEVOTE AN AVERAGE TOTAL OF 60 HOURS PER WEEK TO THE FILING ORGANIZATION AND ANY OR ALL OF THE FOLLOWING RELATED ORGANIZATIONS: FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. FINRA DISPUTE RESOLUTION, INC., AND FINRA INVESTOR EDUCATION FOUNDATION. FORM 990, PART XI, LINE 9 OTHER CHANGES IN NET ASSETS OR FUND BALANCES PRIMARILY RELATE TO ANY OR ALL OF THE FOLLOWING: CHANGES IN NET INCOME/(LOSS), UNRECOGNIZED EMPLOYEE BENEFIT PLAN AMOUNTS AND UNREALIZED GAIN/(L0SS) ON INVESTMENTS. FOR ADDITIONAL INFORMATION PLEASE SEE THE FINRA 2014 ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE @ WWW.FINRA.ORG. FINANCIAL IND REGULATORY AUTHORITY INC 1735 K STREET NW WASHINGTON DC 20006 530088710 REGULATORY DE 501(C)(6) NA false FINRA DISPUTE RESOLUTION INC 1735 K STREET NW WASHINGTON DC 20006 522187577 ARBITRATION DE 501(C)(6) FINRA false FINRA INVESTOR EDUCATION FOUNDATION 1735 K STREET NW WASHINGTON DC 20006 200863779 EDUCATION DE 501(C)(4) FINRA false false false false false false false false false false false false false false false false true false false