Regulatory Notice 14-37

Executive Summary

FINRA is requesting comment on a proposed rule to implement the Comprehensive Automated Risk Data System (CARDS). FINRA initially released CARDS as a concept proposal in Regulatory Notice 13-42. This rule proposal reflects the comments received on the concept proposal.

The rule proposal would be implemented in phases and would exclude the collection of personally identifiable information (PII) for customers, including account name, account address and tax identification number. The first phase would require approximately 200 carrying or clearing firms (i.e., firms that carry customer or non-customer accounts or clear transactions) to periodically submit in an automated, standardized format specific information that is part of the firms’ books and records relating to their securities accounts and the securities accounts for which they clear. The information to be submitted would include data relating to securities and account transactions, holdings, account profile information (excluding PII), and securities reference data. A carrying or clearing firm would not, however, be required to submit specified account profile information primarily related to suitability, for the securities accounts it carries or clears on a fully-disclosed or omnibus basis for others. For all other securities accounts, carrying or clearing firms would be required to submit these account profile-related data elements as part of the first phase of CARDS. The second phase of CARDS would require fully-disclosed introducing firms to submit the specified account profile-related data elements either directly to FINRA or through a third party.

The text of the proposed rule can be found at www.finra.org/notices/14-37.

Questions concerning this Notice should be directed to:

• Daniel M. Sibears, Executive Vice President, Regulatory Operations/Shared Services, at (202) 728-6911;
• Jonathan Sokobin, Sr. Vice President, Office of the Chief Economist, at (202) 728-8248; or
• Victoria L. Crane, Associate General Counsel, Office of General Counsel, at (202) 728-8104.