June 2020 Board Update
FINRA's Board of Governors met on June 10 and 11, when it approved three rulemaking items, FINRA's 2019 Annual Financial Report and an enhancement of FINRA Enforcement’s technology platform. The Board also issued a statement sharing their commitment to the principle of equal justice under the law and to fight all forms of racism and prejudice.
June 17, 2020
FINRA's Board of Governors met virtually last week, and I am pleased to share some updates from our discussions.
The Board approved three rulemaking items (listed below) and approved the organization's 2019 Annual Financial Report, which will be published in the coming weeks. The Board also approved a proposal to enhance FINRA Enforcement's technology platform. This three-year Enforcement Digital Transformation is designed to improve efficiencies in the case workflow process, reduce maintenance costs and deliver additional annual savings.
The Board continued its commitment to engaging with key stakeholders by welcoming SEC Commissioner Elad L. Roisman for a virtual lunch discussion. The conversation topics ranged from the SEC's Regulation Best Interest and prevention of elder fraud, to how FINRA and the SEC are coordinating with each other, the states and other financial regulators to foster ongoing dialogue and provide appropriate guidance during the COVID-19 pandemic. We are grateful Commissioner Roisman could join us.
Shortly after the meeting, the Board issued a statement in support of the organization's determination to pursue its mission with a diverse and inclusive workforce; to expand its efforts to promote the financial literacy and capability of minority communities; and to work collaboratively with others to promote greater diversity and inclusion across the industry, so it can better represent and serve the needs of all investors. Through the statement, the Governors also expressed a commitment to continuing to increase the diversity of the FINRA Board.
For more information about the discussions that took place during the June FINRA Board of Governors meeting, please watch the June 2020 Board Report video. Our next meeting is September 9 – 10. More information regarding the Board's operations, including the membership and responsibilities of its committees, is available at www.finra.org/governance.
Robert W. Cook
President and CEO
Rulemaking Items Approved at the June 2020 Board Meeting
Proposed Procedures to Address Cheating on Qualification Examinations
The Board approved the publication of a Regulatory Notice soliciting comment on a new expedited proceeding rule for failures by associated persons and non-associated persons to comply with the FINRA Qualification Examinations Rules of Conduct; corresponding amendments to the registration requirements rule (Rule 1210); and amendments to the eligibility proceedings rules for requests by sponsoring firms to associate, or continue associating, with persons who have been prohibited from taking FINRA qualification examinations.
Proposed Amendments to FINRA Corporate Financing Rules to Require Members to File Retail Communications Concerning Specified Private Placements
The Board approved filing with the SEC proposed amendments to FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) to require firms to file retail communications concerning specified private placements.
Proposal Relating to TRACE Reporting of Delayed Treasury Spot and Portfolio Trades
The Board approved the publication of a Regulatory Notice soliciting comment on proposed amendments to the Trade Reporting and Compliance Engine (TRACE) Rules to require members to identify corporate bond trades that are priced off of a spread to a U.S. Treasury Security or that are part of a portfolio trade. The amendments are designed to provide investors with more contextual information when there are trades reported with prices away from the current market.
After these new rules and amendments are filed with the Securities and Exchange Commission (SEC), they will be published for public comment and must be approved by the SEC before becoming effective. Visit FINRA's website for more information about FINRA's rulemaking process.