The Financial Industry Regulatory Authority held its annual conference this week and among the main topics was the push to modernize the organization, according to a report by Financial Advisor.
Over 30 sessions on trending topics were held at the event in Washington, D.C. The report called it “business as usual” despite a proposal by the Heritage Foundation’s Project 2025 as well as a bill from Michigan Rep. Lisa McClain that would shift FINRA’s rulemaking, examination and enforcement authority to the Securities and Exchange Commission.
The conference began with FINRA President and CEO Robert Cook discussing ‘FINRA Forward”, a new series of initiatives to improve the authority’s effectiveness in pursuing its mission of protecting investors, maintaining market integrity, and facilitating vibrant capital markets.
The three initiatives are as follows:
-Modernizing FINRA Rules. FINRA is conducting a broad review of its rules to modernize requirements, facilitate innovation and eliminate unnecessary burdens.
-Empowering Member Firm Compliance. FINRA is working to enhance how it supports member firm compliance to better protect investors and safeguard markets.
-Combating Cybersecurity and Fraud Risks. FINRA is expanding its cybersecurity and fraud prevention activities to support member firms’ risk management capabilities and resilience against emerging threats and to better protect member firms and their investors from harm.
“Firms are changing, markets are changing, investors are changing, so we have to change as well,” Cook said. “We’re taking this moment to surge again and redirect our energy toward being the best self-regulatory organization (SRO) we can be.”
FINRA officials said the effort will incorporate member feedback, expand support in navigating today’s complex environment, and strengthen the relevance of today’s rules. “Our rules were often written for a brick-and-mortar world,” said Cook. “That’s no longer how most firms operate.”
The conference also featured a discussion of FINRA’s enhanced Financial Intelligence Fusion Center, a new hub designed to accelerate intelligence sharing and strengthen collaboration between member firms, regulators, and law enforcement. Officials stressed the growing importance of strengthening cybersecurity.
“It’s not a question of if your firm will face a cyberattack—it’s when. We need to be proactive, not reactive,” said Greg Ruppert, FINRA’s executive vice president of member supervision.
FINRA has provided member firms with a range of resources for establishing a cybersecurity program, addressing cybersecurity vulnerabilities, combating cyber-enabled fraud, and identifying emerging scams. FINRA has also hosted cybersecurity-focused events to provide learning opportunities for member firms, including cybersecurity conferences and webinars with representatives of the FBI to discuss cyber and financial crimes. “We’re becoming the disruptors,” said Ruppert. “By forcing criminals to evolve and making it more expensive for them to operate, we’re shifting the fight in our favor.”
McClain’s bill, introduced last month, is called the Restoring Accountability in Market Supervision Act and would eliminate FINRA’s regulatory role. “FINRA has drifted far from its intended purpose of safeguarding investors and ensuring fairness in financial markets. This bill puts the power back where it belongs—with a federal agency that is subject to congressional appropriations and oversight,” said McClain.
FINRA defended its role as a regulator, FInancial Advisor reported. “For 85 years, FINRA, the private, self-regulator of broker-dealers, has protected investors, promoted market confidence and safeguarded market integrity at zero cost to the American taxpayer,” FINRA spokeswoman Rita De Ramos said.
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