News Release

FINRA Issues Retrospective Rule Review Reports

For Release: 
Tuesday, December 9, 2014
Contact(s): 

George Smaragdis  (202) 728-8988
Nancy Condon (202) 728-8379

Reports Assess Rules on Communications With the Public and Gifts, Gratuities and Non-Cash Compensation

WASHINGTON — The Financial Industry Regulatory Authority (FINRA) issued two Retrospective Rule Review Reports assessing, respectively, the effectiveness and efficiency of FINRA's communications with the public rules and FINRA's rules on gifts, gratuities and non-cash compensation.

The reports reflect widespread agreement among affected parties that the rule sets have been largely effective in meeting their intended investor protection objectives. However, the rules and FINRA's administration of them may benefit from some updating and recalibration to better align the investor protection benefits and the economic impacts.

"These two reports represent a major step forward for FINRA as we ensure our rules remain thoughtfully constructed to protect the interests of the investing public," said FINRA's Chief Economist Jonathan Sokobin.

FINRA's assessment of these two rule sets was grounded in an extensive and multi-step process that solicited feedback from a diverse and broad set of stakeholders.

"Over the next several months, FINRA will explore a combination of guidance, proposed rule modifications and administrative measures to enhance the effectiveness and efficiency of the rules," said Robert Colby, FINRA's Chief Legal Officer.

FINRA's Retrospective Rule Review consists of an assessment phase and an action phrase. The reports issued today are the culmination of the assessment phase. In the upcoming action phase, FINRA will engage in its usual rulemaking process to propose any amendments to the rules based on the assessments.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.