Update: FINRA Board of Governors Meeting
September 30, 2016
Dear Executive Representative:
I’m writing today to continue the practice my predecessor, Rick Ketchum, established to share updates from FINRA Board of Governors’ meetings (which are outlined below and addressed in the board video report). I’d also like to take this opportunity to give you some initial thoughts as FINRA’s new president and CEO.
FINRA's mission of investor protection and market integrity has always been critical to the health of our financial markets. And the need for thoughtful and effective regulation has never been more important than it is today. As the securities industry continues to evolve and becomes ever more complex, investors and other market participants must have confidence that those who regulate our markets are up to the task. Thus, FINRA, too, must continually evolve and adapt to new challenges and opportunities.
Since joining FINRA six weeks ago, I have had the chance to meet many of FINRA’s hardworking staff, to learn more about FINRA’s programs and initiatives, and to further develop my thoughts about FINRA’s strategic priorities. But rather than crafting a vision for FINRA based solely on my own views and those of FINRA staff, I want to hear from our members and other stakeholders as well—what do you think FINRA’s priorities should be? What do you think we do well, and what do you think we could do better? Given how markets and the regulatory environment have evolved, how can FINRA position itself to be the most effective regulator it can be with a mission of investor protection and market integrity?
To this end, I have begun a “listening tour” to meet with investors, other regulators, policymakers, a cross-section of member firms and industry organizations. During the coming months, I will travel to various cities to meet with member firms and other stakeholders and I will be attending the FINRA Small Firm Conference in November.
As a self-regulatory organization, it is important that we hear your views. I don’t expect that there will be agreement on every issue, and investor protection and market integrity must remain our highest priority. But in order to be as effective as possible FINRA must fully understand the industry it regulates and listen thoughtfully to constructive ideas from any corner about how we can better execute our mission.
I look forward to working with you on our mutual goal of serving and protecting investors.
Robert W. Cook
President and CEO
Rulemaking Items Discussed at the September 2016 Board Meeting
The Board authorized FINRA to publish a Regulatory Notice seeking comment on proposed amendments to Rule 2210 (Communications with the Public) to permit projections of the performance of asset allocation or other investment strategies in customized investment planning illustrations. The amendments would require a reasonable basis for all assumptions, conclusions and recommendations and certain disclosures, including the material assumptions and limitations applicable to the illustration.
Non-public Arbitrator Definition
The Board authorized FINRA to file with the SEC proposed amendments to Rules 12100 and 13100 (Definitions) to revise the non-public arbitrator definition. Specifically, the amendments would provide that a non-public arbitrator is a person who is otherwise qualified to serve as an arbitrator, and is disqualified from classification as a public arbitrator.
Sending Arbitrator Selection Lists to Parties
The Board authorized FINRA to file with the SEC proposed amendments to Rules 12402, 12403 and 13403 (Sending Lists to Parties) to expedite sending arbitrator selection lists to parties. Specifically, the amendments would provide that the director of Arbitration will send the list or lists the Neutral List Selection System generates to all parties at the same time, within approximately 30 days after the last answer is due, regardless of the parties’ agreement to extend any answer due date.