Upcoming Board Meeting and FINRA360 Update

The FINRA Board of Governors meets this week and will discuss—among other agenda items—the progress we have made with respect to FINRA360, an initiative in which FINRA is looking at our processes to ensure we are operating as an efficient and effective self-regulatory organization. In advance of this meeting, I wanted to update you on this progress and to share with you some key information about the Board meeting, including the rulemaking items that will be discussed.

FINRA360 Update
Since the launch of FINRA360 earlier this year, we have been conducting an ongoing, comprehensive review of a wide range of FINRA functions. One of our first steps was to seek feedback on how we engage with firms, investors and other stakeholders, via a Special Notice on Engagement.

Many of the comments we received focused on providing greater transparency around our governance structure and our Board’s operations. I am pleased to report that we recently launched a new FINRA Governance web page that includes governance documents, Board meeting dates, Board member bios, and information about our various standing and advisory committees.

Enforcement has been another area of focus. In July, we consolidated our enforcement activities under one unified group, headed by new Head of Enforcement Susan Schroeder. The unified structure will improve our ability to streamline investigations and provide a more coordinated and consistent approach to our oversight.

In response to specific suggestions received through the Special Notice and other FINRA360 reviews, we also have, among other steps:

  • adopted a policy of providing for a longer 60-day comment period when soliciting comment on new rule proposals through Regulatory Notices;
  • launched an Innovation Outreach Initiative to foster an ongoing dialogue with the industry to help us all better understand FinTech innovations and their potential impacts;
  • begun a review of our capital formation rules in an effort to modernize our regulation of those activities while maintaining important protections for investors; and
  • implemented links between our Regulatory Notices announcing SEC approval of a proposed rule change and the rule filings themselves, including any response to the comments received.

For a more comprehensive view of our progress around FINRA360, I invite you to visit our FINRA360 web page. We will continue to update that page as more improvements are made.

Other Board Matters
The September Board meeting is also scheduled to include the following discussions, among other items.

  • The Board will consider two rulemaking proposals:
    • Amendments to FINRA Rule 3110 (Supervision) to give firms the option to remotely conduct required office inspections of locations that meet specified conditions
    • Amendments to FINRA Rule 8312 (FINRA BrokerCheck Disclosure) to make certain changes to the information disclosed through BrokerCheck
  • The Finance, Operations and Technology Committee is scheduled to discuss a long-term plan to rebuild the Central Registration Depository (CRD), including the financial and technological impacts.
  • The Regulatory Operations Oversight Committee will discuss FINRA’s enforcement and examination activities, including updates around the transition in the enforcement program to a single, unified group, which I mentioned earlier.
  • Haime Workie from FINRA’s Office of Emerging Regulatory Issues is set to update the Regulatory Policy Committee on the use of Distributed Ledger Technology (also known as blockchain) in the securities industry.
  • Gerri Walsh from FINRA’s Investor Education Department will provide the Board with an update on the organization’s investor education efforts.

In keeping with our practice, I will send you an update after the meeting about what comes out of these discussions.

Sincerely,

Robert W. Cook
President and CEO