FINRA Advisory Committees
The Compliance Advisory Committee is composed of the senior compliance officers of FINRA's largest member firms. The committee provides input to FINRA regarding the effect of current and proposed securities rules and regulations—including FINRA rules—on members engaged in retail and institutional brokerage and investment banking activities. The committee also assists FINRA in identifying and promoting best practices regarding broker-dealer compliance activities.
FINRA Staff Liaison:
Grace B. Vogel
The Corporate Financing Committee provides advice and makes recommendations to FINRA on regulatory and public policy issues arising from firms' capital-raising activities, including firms' investment banking role in public offerings and private placements. The committee provides advice to FINRA in regard to offerings involving corporate equities, debt, closed-end investment companies, real estate investment trusts and direct participation programs, and on issues arising from member firms' research activities.
The Economic Advisory Committee (EAC) advises FINRA on academic research and macroeconomic developments that may impact its regulatory programs. EAC members present original research and discuss economic developments to better inform FINRA initiatives.
FINRA Staff Liaison:
The Financial Responsibility Committee advises and makes recommendations to FINRA primarily about FINRA and the Securities Exchange Commission's rules and policies affecting the financial and operational activities of firms. It also provides input on proposed FINRA rules and initiatives, or suggests amendments to existing FINRA rules, related to financial responsibility, clearance and settlement of securities transactions or other operational matters.
The Fixed Income Committee advises and makes recommendations to FINRA about regulatory initiatives, rules and policies and public policy issues involving debt securities, including municipal securities. The committee addresses a broad range of issues concerning fixed income transactions, fixed income market participants, transaction reporting, transparency and pricing, suitability, advertising and disclosure, debt mark-ups and commissions, conflicts of interest, debt research, and training and supervision of persons engaged in debt securities business activities.
The Independent Dealer/Insurance Affiliate Committee is composed of individuals representing independent contractor/investment adviser firms that provide comprehensive financial services typically involving non-proprietary products, and individuals from insurance company affiliated broker-dealers. The committee provides advice and guidance to FINRA on matters relating to the operation and regulation of these firms and on the distribution of investment products, including mutual funds, variable annuities and variable life insurance. The committee also updates FINRA on industry trends and regulatory developments.
FINRA Staff Liaison:
The Investment Companies Committee makes recommendations to FINRA regarding the effect of proposed and existing FINRA rules and interpretive positions on member firms' sales and distribution of investment company securities. The committee may recommend new rules or amendments to existing rules. The committee also comments on industry trends and SEC and state regulatory developments.
The Market Regulation Committee advises FINRA on market regulation and trading issues. The committee provides input and perspective on proposed rule changes and other initiatives relating to quotations, executions, equity trade reporting, short sales and trading practices. Committee members also provide input on the administration of various FINRA market regulation and trade reporting systems, such as the Trade Reporting Facilities, the Order Audit Trail System and the Alternative Display Facility, as well as national market system plans. Committee members may also serve on FINRA hearing panels that hear issues related to market regulation and trading.
The Membership Committee represents a cross-section of the securities industry and advises FINRA on wide-ranging matters of interest and concern to firms. The committee's responsibilities include, but are not limited to, providing feedback on the impact of current and proposed regulatory requirements; insight on industry trends, issues and needs regarding regulatory compliance; assistance in identifying and promoting sound compliance practices; advice on FINRA's regulatory systems; and ideas for compliance offerings and educational programs to meet firm needs.
The National Arbitration and Mediation Committee (NAMC) makes recommendations to FINRA regarding recruitment, qualification, training, and evaluation of arbitrators and mediators. The NAMC also makes recommendations on rules, regulations and procedures that govern the conduct of arbitration, mediation, and other dispute resolution matters before FINRA.
The NAMC members include investors, securities industry professionals and FINRA arbitrators and mediators. A majority of the NAMC members and its chair are non-industry representatives. This diverse composition ensures a neutral approach in the administration of Dispute Resolution's forum, promoting fairness to all parties.
The Operations Advisory Committee provides guidance and insight on securities industry operational trends and their potential impact on controls and regulation. The committee also provides input on the potential effect proposed FINRA rules may have on the industry and the barriers and costs to implementation.
The committee advises FINRA on global clearance, settlement, data standards and other back office issues that impact firms and the securities industry. In addition, the committee provides insights on the impact of Transparency Services trade reporting tools—such as the Alternative Display Facility, Trade Reporting and Compliance Engine, OTC Reporting Facility and Trade Reporting Facilities—on the industry.
FINRA Staff Liaison:
The Small Firm Advisory Board (SFAB) exists to ensure that issues of particular interest and concern to small firms are effectively communicated to and considered by the FINRA Board of Governors. The SFAB reviews and is apprised of all major regulatory initiatives before they are brought before the FINRA Board. In addition to the SFAB, small firms are also represented through three reserve positions on the FINRA Board. The SFAB comprises ten members – 5 elected and 5 appointed – all senior executives of small firms.
The FINRA Technology Advisory Committee (FTAC) advises FINRA on technology issues in the financial services industry that affect clearance, settlement, data standards, compliance monitoring, security and disaster recovery. Specifically, the FTAC provides guidance on emerging trends in the securities industry and the effect on technology, and suggests technology enhancements to improve regulation of FINRA member firms. The FTAC members are senior technology executives from securities firms.
FINRA's Uniform Practice Code (UPC) Committee advises and makes recommendations to FINRA on issues relating to the UPC and over-the-counter (OTC) market trading, processing and operations. For example, the committee considers issues related to the clearance and settlement of OTC securities transactions, FINRA's Rule Series on Clearly Erroneous Transactions, and UPC corporate actions processing issues.
FINRA District Committees serve an important role in the regulatory process by alerting FINRA to industry trends that could present regulatory concerns. Committee members consult with FINRA on proposed policies and rule changes and serve on disciplinary panels in accordance with FINRA rules. They are called upon to apply their knowledge and expertise of issues facing the securities industry to support FINRA's investor protection mission.
District Committee members are elected by direct nomination based on firm size, and the size and composition of the committees align with the industry representation on the FINRA Board of Governors.
FINRA Staff Liaison:
The National Adjudicatory Council (NAC) reviews all disciplinary decisions issued by FINRA hearing panels and presides over disciplinary matters that have been appealed to or called for review by the NAC. The NAC also reviews statutory disqualification matters and considers appeals of membership proceedings and exemption requests.
The NAC comprises 14 members—seven industry members and seven non-industry members. The seven industry members of the NAC include two small firm, one mid-size firm, two large firm and two at-large industry members. Each of the NAC members has an equal vote when considering appeals and other matters.