The Financial Industry Regulatory Authority announced that its Board of Governors approved four rule proposals at their most recent meeitng.
The measures are part of the ‘FINRA Forward’ initiative that is aimed at modernizing FINRA rules, empowering member firm compliance, and combating cybersecurity and fraud risks.
The four proposals, approved at the Sept.29-30 meeting, were as follows:
- Membership Application Review: This would amend rules governing FINRA’s review of new and continuing membership applications to better focus on risk.
- CEO Certification Deadline Flexibility: The annual CEO compliance and supervisory processes certification deadline would be made more flexible.
- Rescission of the Same Quote Rule: The plan would rescind the Same Quote Rule requiring members to display the same price for any over-the-counter equity security that they quote across multiple platforms.
- Mutual Fund Cash Compensation Disclosure: A mutual fund prospectus cash compensation disclosure requirement would be rescinded in light of its overlap with the SEC’s Regulation Best Interest and other disclosure rules.
The proposals, which be filed with the Securities and Exchange Commission, reflect stakeholder feedback received through FINRA Forward..
“These rule proposals underscore FINRA’s continued commitment to refreshing the regulatory framework applicable to member firms, markets and investors,” said FINRA Board Chair Scott Curtis.. “They focus membership application reviews more closely on risk, provide greater flexibility in meeting certification deadlines and eliminate an outdated quoting requirement, among other improvements. Together, they illustrate how FINRA is taking meaningful steps to enhance efficiencies while preserving the investor protections that are central to FINRA’s mission.”
During the meeting, the Board of Governors also received several briefings on key initiatives as part of its oversight of management and the administration of FINRA’s work. These included updates on FINRA’s AI strategy, market surveillance program, cyber and information security program, rule modernization initiative and the recent integration of several teams into a unified Regulatory Operations division.
Another briefing, by FINRA’s Executive Vice President and Head of Enforcement Bill St. Louis, focused on steps FINRA is taking to address recommendations from the recent external review of the Enforcement Program. The Board also received updates on FINRA’s finances, including recent measures to address surplus reserves, as planning continues for the 2027 budget.
The attorneys at Hyman Cotter PC regularly monitor SEC, FINRA and other self-regulatory organizations’ rule-making activities to help ensure that our clients are aware of any new policies, while assisting them in implementing any recommended changes. Our clients include broker-dealers, RIAs, banks, investment companies and hedge funds, along with registered representatives and other individuals participating in the securities industry. Should you be in need of experienced counsel regarding a matter involving a regulatory agency, please contact Hyman Cotter PC at 833-665-0784 or through our online contact form.
