The Financial Industry Regulatory Authority plans to address two regulatory hot spots for firms this week at its board of governors meeting, including procedures to stop reps from cheating on exams and the regulator’s investigation of the wave of zero-commission funds in the broker-dealer industry.

At the two-day board meeting that begins today, Finra's Regulatory Policy Committee will discuss proposed procedures to address cheating on qualification examinations. The subject of reps cheating on exams reared its head in March when Finra suspended an ex-Merrill Lynch rep after he was caught cheating on exams twice. The regulator suspended Andre Derricotte two years after he was caught possessing and accessing personal notes and other “unauthorized materials” while taking two separate industry exams within a month of each other, according to Finra. Without admitting or denying the charges, he agreed to the 24-month suspension and paid a $5,000 fine.

Finra also suspended a Goldman Sachs rep for 18 months after it was discovered that the she brought her cellphone to an exam. Finra said that when she took the test last spring, it was discovered she “possessed and had access to a prohibited device.”

The high-profile cheating cases prompted the board to ask staff to create new procedures to ensure that anyone administering exams has clear steps and strategies in place for discovering and eliminating cheating.

Also, the Regulatory Operations Oversight Committee is slated to take up Finra's recent targeted exam of firms that charge clients zero commissions. Finra’s board will hear the results of the sweep at the meeting and may consider rule changes to ensure that there are no hidden costs for zero-commission clients.

The sweep comes amid a battle among the largest broker-dealers to drop trading commissions to zero. Charles Schwab, Fidelity, E-Trade, TD Ameritrade and Wells Fargo have all announced zero-transaction commissions.

The regulator announced in February it was conducting a review of firms that had decided to not charge commissions for customer transactions and what the impact that not charging commissions is or can be on broker-dealer’s order-routing practices and decisions.

Finra’s Trading and Financial Compliance Examinations division told firms in a letter that they were required to provide answers on their zero-commission practices, including turning over a detailed list of types of customers, broker-dealer clients and institutional customers for which the they effect any transactions but don’t charge a commission.

The regulator also asked firms to identify and describe all factors and limits that go into the determination of whether a customer receives zero-commission transactions. Firms were also asked to describe the fees, expenses or other costs they charge customers who aren’t charged commissions.