PODCAST
How FINRA Is Enhancing Member Firm Examinations
Examinations are a cornerstone of FINRA's regulatory oversight, but how we conduct them is evolving. As part of FINRA Forward, we're making our approach more risk-informed, more efficient, and more transparent.
On this episode, J. Koutros, Senior Vice President of Member Supervision, Operations, Procedures, and Standards, Jim Reese, Senior Vice President of Examinations, and John Martino, Vice President of Examinations, explore the changes reshaping FINRA's examination program: streamlined first firm exams for lower-risk firms, extended exam cycles where warranted, more targeted data requests, and advance notice about exam timing.
The guests also look ahead to new technology, enhanced transparency around preliminary findings, and the ongoing feedback that drives FINRA’s continuous improvement.
Resources mentioned in this episode:
FINRA Examination and Risk Monitoring Programs
Ep. 185: How FINRA is Streamlining Data Requests
FINRA Forward: A Year of Progress
FINRA Quarterly Regulatory Policy Agenda
Blog Post: FINRA Forward’s Rule Modernization—An Update
Blog Post: Vendors, Intelligence Sharing and FINRA’s Mission
Blog Post: FINRA Forward Initiatives to Support Members, Markets and the Investors They Serve
Blog Post: A Progress Update on Rule Modernization
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FULL TRANSCRIPT
00:00 – 01:09
Margherita Beale: Examinations are a cornerstone of FINRA's regulatory oversight, but how we conduct them is evolving. As part of FINRA Forward, we're making our approach more risk-informed, more efficient, and more transparent.
On this episode, we'll explore the changes reshaping FINRA's examination program: streamlined first firm exams for lower-risk firms, extended exam cycles where warranted, more targeted data requests, and advance notice about exam timing. We'll also look ahead to new technology, enhanced transparency around preliminary findings, and the ongoing feedback that drives FINRA’s continuous improvement.
Welcome to FINRA Unscripted. I'm your host, Margherita Beale. Here to talk to us today about FINRA's evolving approach to examinations are J. Koutros, Senior Vice President of Member Supervision, Operations, Procedures, and Standards, Jim Reese, Senior Vice President of Examinations, and John Martino, Vice President of Examinations. J., Jim, and John, welcome to the podcast.
01:08 – 01:09
J. Koutros: Thanks for having me.
01:09 – 01:10
Jim Reese: Good morning.
01:10 – 01:11
John Martino: Thanks for having us.
01:11 – 01:24
Margherita Beale: So, I know that you've all been on FINRA Unscripted before, but for listeners who may not be familiar with you, can you give us a quick overview of who you are and what you do at FINRA? Jim, why don't we start with you?
01:24 – 01:38
Jim Reese: Good morning, Margherita. As you said in the introduction, my name is Jim Reese and I have the pleasure of leading the Examination program here at FINRA. I've been doing that for about six months and prior to that I helped stand up the Strategic Intelligence and Analytics organization within FINRA.
01:38 – 01:41
Margherita Beale: Great. Thanks, Jim. What about you, J.?
01:41 – 02:03
J. Koutros: Good morning and thanks for having us again. My name is J. Koutros. I'm a Senior Vice President in Member Supervision, Operations, Procedures and Standards. Our primary focus is continuing our efficiency and effectiveness of our programs, ensuring that our programs are running optimally. And prior to that, I worked in what is now Risk Monitoring for 15 years. And then prior to that, I was in the industry.
02:03 – 02:07
Margherita Beale: Great, thank you, J. And last but not least, John.
02:07 – 02:33
John Martino: Hi, thanks again for having us. John Martino, as you mentioned, I'm a Vice President in FINRA’s firm examination program. I've been with FINRA for about 23 years, and that's included roles both within our firm exam and risk monitoring team. In my current role as vice president in the exam program, I oversee our firm examinations at firms that are assigned to the retail business model.
02:33 – 02:44
Margherita Beale: Fantastic. So, to get started, can you remind listeners what FINRA's exam team is and what kind of exams it encompasses?
02:44 – 03:30
Jim Reese: So, examinations are the foundation of FINRA's regulatory oversight function. We examine firms for compliance with FINRA rules, federal securities laws and regulations, and when applicable, exchange rules. Our program is what we refer to as risk informed. So that just means that our selection of a firm to examine depends on the type of firm and our assessment of risk and impact a firm poses to investors and the markets. So, we'll all talk about this a little bit later, specifically around our risk assessment process and how we work closely with our risk monitoring and intelligence teams, but at its core, our exam supports and empowers compliance through our observations and findings. The goal is to identify issues before they harm investors and markets. But when we do find significant deficiencies or fraud, our teams will refer to those matters to investigations or directly to enforcement.
03:30 – 05:01
John Martino: One way to think of us is the front line for assessing firms’ compliance. It's through those efforts that Jim has just outlined that we've been able to effectively promote proactive compliance among our membership, as well as strengthen the overall market integrity and investor protection.
So, when we refer to a firm exam, what we're referring to is an examination that we're conducting of our member firms at least every six years. So every one of our member firms are examined, and part of that examination is us taking a risk-based approach and really looking across the risk hierarchy of a firm and identifying what we believe are those areas of material risk that we would want to incorporate into a particular examination. And each of those exams really from year to year or from firm to firm can look different based upon that risk assessment. We're using internal intelligence information that we're gathering from our membership and using that as a way in which to make a determination as to what the scope of a particular exam will look like. And again, it's really that process that assists us in making sure that we're being risk-based and really focusing each exam on the areas that are most applicable to maybe a particular trend that we're seeing in the industry or just something that's unique to the risk profile of a particular firm.
05:01 – 05:22
J. Koutros: I think in addition to the risk pieces of our examination, we also do have some various components that we have either through a mandate or through other means of like regulatory services agreements where we conduct examinations on behalf of various exchanges or other regulatory agencies such as the MSRB.
05:22 – 05:44
Jim Reese: Overall, our exams are tailored to risk. So, they can look at multiple risk areas, or they can be very targeted and evaluate compliance and testing of compliance in very specific areas. And then, of course, during the examination, as other risks are identified, our scope could change. So it's a very dynamic program. Again, sometimes it's kind of zoomed out, and sometimes it's zoomed in.
05:44 – 05:54
Margherita Beale: Fantastic. So, what prompted FINRA to evolve its risk informed approach to examinations as part of FINRA Forward?
05:54 – 07:17
J. Koutros: Let me start a little bit before FINRA Forward. We as a program constantly review our efficiency and how we approach our day-to-day work. Obviously, the examination program has such a large footprint. It's a program that we're constantly reviewing and evolving. There's new technology, new data, new approaches that we want to apply to such a critical piece of our organization. FINRA Forward has allowed us to really focus in on various aspects of that. We recognized the program had to continue to evolve alongside changes with the firms’ business models. So, we've made some adjustments around the firms’ business models and the segments within those models.
We've also heard feedback from our industry on need for more transparency, a little bit of reduction in the burden our exams cause through potentially process improvements that we needed to take on. So, we've done a lot of thinking and listening to our industry or the member firms within the industry. And then we would make some significant adjustments based on that. I would say the largest adjustment is the use of data upfront and try to utilize the data that FINRA has to allow us to start from a more informed position and allows our examinations teams to work a little bit more efficiently with the industry as we start requesting information.
07:17 – 08:22
John Martino: It's that feedback that J. mentioned that we received from our industry participants that has really been instrumental in our ability to move our program forward. As J. mentioned, we're finding different ways in which we can solicit that feedback, whether it's through our engagement with our firms and our membership committees. We also, as part of the exam program, at the conclusion of our examinations, senior leaders within the program reach out to a sample of different firms in order to engage their senior leaders, usually the chief compliance officer of the firm, to gather feedback about how that particular examination went.
What was the impact that FINRA may have had on the firm's resources? How is it that our approach and risk scoping may have helped inform different compliance efforts that the firm is engaged on? And it's really through that feedback that we're able to continue to build the program and advance it in the way in which we want to ensure that we are really taking that risk-based approach.
02:22 – 08:34
Margherita Beale: So, as a part of all of this, you recently published the risk model framework and business model definitions. Can you walk us through what those are and why they're significant?
08:34 – 09:33
Jim Reese: As I mentioned in the beginning, the examination program works in tandem with our risk monitoring and intelligence teams. So those teams conduct ongoing risk and threat assessments through their ongoing engagement with firms. And those analyses continuously flow into our dynamic examination planning. This framework also allows us to develop a risk profile for each firm, which ultimately determines the examination frequency. As we said earlier, we classify firms by primary business model, and we'll talk a little bit about this to a greater extent, but the business models are capital markets, carrying and clearing retail, like what John oversees, trading execution, and diversified. So, from there we can further classify firms into various subgroups. And this approach enables us to assign staff to examine and monitor firms based on their subject matter expertise, but it also allows the teams to share information, spot trends across these firm business models, further enabling us to identify and mitigate potential issues more efficiently. So, by framing our program in this way, our staff develops deep expertise in the operations and risks affiliated with the business models to which they're assigned.
09:33 – 10:51
J. Koutros: So, Jim, just to add on a little bit more, obviously we have published recently our risk assessment process, as well as the business segment and business models to provide more transparency as to how we think about the member firms that we are going to examine. Or just, as Jim said, more holistically, from a regulatory operations perspective, from an intelligence gathering, from a risk assessment process, it's all based on the business models’ activities and services firms provide to allow us to make a more precise exam program, but even a more precise profile of a firm.
FINRA evaluates all firms across 11 broad risk categories and allows us to build that foundation as to how and where we're going to plan to execute based on potential risk. The framework is through a lens of two basic items, likelihood as well as impact. So, in other words, FINRA looks at the likelihood of an adverse event could happen to a firm and the impact it could have on the industry across. Obviously, we want to spend our time with what can impact the investors. So, our focus is around not only the risk likelihood, but also the impact across the industry. This allows us to really concentrate on the protection of investors, as well as ensuring the market structure.
10:51 – 11:00
Margherita Beale: So, one of the recent changes that we've made is we've streamlined first firm exams for lower risk firms. How does that work?
11:00 – 12:16
J. Koutros: One of the areas that we have looked at is what we do from a mandate perspective. FINRA is mandated to conduct a first firm exam within the first six months of a firm being approved for a business with some nuances of when business starts, it could be extended a little further. That being said, like everything else that we're looking at from an intelligence perspective as well as a data perspective, a firm goes through our membership application process. What we have done is start leveraging the data that we receive in that first, in that membership application process and apply it to how we want to tier those first firms. So, when we're doing those first firm exams now, we are leveraging the intelligence from our membership application group, and tiering those firms into of three different tiers, which allows us to really focus our staff more efficiently on where there's potentially riskier new firm versus a lower risk new firm. I would say the new approach has allowed us to really concentrate on how we staff the exams, what we focus in on the exams, and since June, we've seen a significant reduction of time spent on examinations, but we feel like they are more focused and around what's important to the firm and to FINRA.
12:16 – 12:37
Jim Reese: I think J. hit the nail on the head here. It's really, again, kind of zooming out, it's really the approach to how do we kind of maximize the use of our resources to the higher risk areas. And through that handoff from the assessments that our membership application team is doing to the exam team, we can really make it much more efficient process on both sides, both for the new member firms as well as the examination staff reviewing those firms.
12:37 – 12:59
J. Koutros: The last thing I would add there, Jim, is we think it is a win-win across. The lower risk firms have the benefit of reduced examination burden and faster completion of times. Well, while we're able to do that, we're able to dedicate more resources to areas that potentially are more riskier and greater regulatory concern. Ultimately, we think this strengthens our oversight of the securities industry.
12:59 – 13:08
Margherita Beale: Can you characterize what percentage of firms would be considered lower risk firms in this framework?
13:03 – 13:26
J. Koutros: Based on our data, about 80% of the new member firm examinations are in the lowest tier, which would be tier one. And this allows also those teams, the 20% to really take maybe even a deeper dive into those examinations. So, for the vast majority, 80%, they do come out as lower tier.
13:26 – 13:35
Margherita Beale: Great. So beyond first exams, you're also adjusting the ongoing exam cadence for certain firms. Can you tell us about that?
13:35 – 16:00
Jim Reese: Sure, so this is a direct response to the ongoing assessments that our risk monitoring team and the analysts assigned to every firm performs, right? And how do we supplement that? So as I mentioned earlier, we have this risk and form examination schedule that builds upon the framework for determining exam frequency based on the firm's risk profile, all directly coming out of risk monitoring in our intelligence teams.
So, for lower risk firms, we've extended the examination cycle from four years to six years, where warranted. Our risk monitoring intelligence and even our market surveillance teams continue to conduct ongoing assessments and engage with firms at various levels throughout various risk areas, topics, products, reps, branches. They're performing real time analyses that continuously flow into our examination planning and scoping. And sometimes another organization is addressing the risk and our examination teams are supplementing the review of particular areas outside of that risk. So it's really, in some cases, complementary work or it can be direct work depending on the scope of the other teams and the risks and the risk analysis that they're performing.
So, by adjusting the frequency of our exams for lower risk firms, we can reallocate those resources to areas of greater focus around investor protection and market risk. So that allows us to spend more time in those areas doing more testing, evaluating controls and supervisory procedures and policies. And again, if these are higher risk areas, those arguably may take more time to perform. So, by pushing out those lower risk firms to a six-year cycle, we can focus on those higher risk activities.
But again, just because a firm may be deemed lower risk today, it doesn't mean that we put them back on the shelves and then we take that book off the shelf in six years. Our risk assessment process is real time. If a risk materializes at a firm or a firm takes on a new client type or starts changing its business activities, the risk monitoring team are always evaluating those and we can account for those changes. We can account for those changes, but obviously we do want to have an out-year cycle, so every firm is touched by the examination program, but realizing that all the other parts of FINRA, the investigations teams, the enforcement teams, the examination teams, of course, that we're talking about today, and our risk monitoring teams are all there, you know, constantly looking and evaluating firms through multiple lenses. So this is really just, from the examination's perspective, moving that out to a six-year cycle, realizing all these other touch points that we have with FINRA, and how that all coalesces into our risk scoping and risk targeting for firms.
16:00 – 16:47
J. Koutros: And just tying this back to some of the things we said earlier, we take both the risk likelihood and risk impact. So a firm to qualify would have to be both low risk as well as low impact, as well as some of the components that we've talked about, whether it's a regulatory services agreement that we have in place or MSRB requirements. All those are taken into account before we can determine if a firm would qualify for the six-year backstop. This past year, we had 40 firms that qualified to extended backstop. We also added a process where our risk monitoring team would review to ensure that nothing has changed at those firms, as well as the impact, as Jim was saying, to the scoring methodology to ensure that we had the and correct information when we were making that determination.
16:47 – 16:59
Margherita Beale: So, as you've all alluded to, the backdrop of a lot of this is a change in how we approach data requests. Can you talk a bit about that more specifically?
16:59 – 20:39
John Martino: Yeah, I can get us started on this topic. So, as you mentioned, our data requests are really at the backbone of what we do as far as identifying risk and really trying to leverage the intelligence that we have within our organization. And as such, we're continuing to evolve that process and what and how it is we go about requesting data.
So, specific to the exam program, we're no longer defaulting to these broad, blanket requests that might look at a full year of transactional data as an example. Instead, we're leveraging existing intelligence to pinpoint specific areas of risk. And then we're evolving our requests to be more specific, to really target the data that allows us to focus maybe on a particular product or even a particular time period, so we can be much more refined when we're going out with our requests to our membership.
This is really all in kind of that spirit of moving forward to a true risk-based decision-making process. As many of our members have experienced, we historically may have defaulted to requesting a blotter at the onset of really most of our examinations. And firms had told us that this practice also often really kind of diverted their scarce resources, whether that's from their other compliance responsibilities and maybe at times maybe not yielding an obvious benefit to them and, quite frankly, to our overall exam process.
So this new approach really allows us to reduce that volume and scope of those external data requests that we're making to our firms. And we hope that really helps them free up resources and as well as free up some of the resources here at FINRA so that our teams can focus on that more material risk. And to highlight this, you know, when we took a look back in 2025, we saw that our total external requests to the industry from a data perspective across our organization dropped by approximately 12%. And with these fewer, more targeted requests, it's helped FINRA become more efficient and more effective in our oversight while again allowing our firms to pay more attention to other priorities, including strengthening their compliance and controls.
So switching to this more risk-based approach has also increased and sped up the time in which we're able to execute our exams. We were spending a lot of time going back and forth with our firms and with our internal technology department trying to ingest these large amounts of data. And so this approach or change in approach has really assisted us in reducing some of the time that we need to spend, you know, moving an exam forward.
Another priority here at FINRA is trying to create a more centralized library of the written supervisory procedures that we're requesting from our membership. And as I'm sure our membership has experienced, you know, those requests can come from multiple departments across FINRA, not only within our exam program, but maybe from investigations, from enforcement. And at times we may be looking for procedures that are similar to what other departments have looked for. And these are large documents and to the extent that we're able to leverage and utilize that information that we already have in-house or have already requested from the firms, we want to continue to try and find ways to do so.
So we hope that by building this infrastructure to share them internally in a secure manner, our staff will be able to check those existing records before requesting updated or additional information from our firms.
20:39 – 21:59
J. Koutros: The situation that John explained early on with our blotter and our blotter requests and using data upfront to try to reduce the amount of blotters that we request and the frequency or how we request them really did shine a spotlight on what else can we do from a data perspective upfront. And we are very focused on, as I mentioned earlier, the 11 risks, identifying key data points for each of those risks so that when we are going into examinations, that we have some comfort that there is potentially something that we want to think about. We don't want to just go in wondering if there's something to think about and then just start requesting data.
So a lot of our focus and a lot of our challenge for our staff is, what data does FINRA have today? Because we do collect a lot of data. What data does FINRA have today that we can utilize to make a more informed decision starting point so that the extra burden doesn't fall on the member firms, it actually falls on FINRA to ensure that we're doing what we need to do upfront. Part of that is also building an infrastructure where the intelligence can be shared across the organization. So, like John just mentioned, the written supervisory procedures. Part of that is building an infrastructure to maintain a library that can be utilized. that, it sounds pretty simple. And why haven't we thought about it earlier? A lot of it is the infrastructure that you need to build to help support that that takes time and effort.
21:59 – 22:20
Jim Reese: So as part of all of these efforts, we partner extensively both with technology and the new office of the chief data officer. As we are trying to bring this information together, make it more accessible, obviously with the right permissioning to respect those boundaries. But all of this is around that access early and often so that we can make those informed decisions that John and J. went.
22:20 – 22:28
Margherita Beale: Another change is that firms are now getting much more advanced notice about exams. Can you talk about how that works?
22:28 – 23:55
Jim Reese: Sure, I’ll kick it off. As J. said in the beginning, it was another kind of area of feedback that we have been receiving for quite some time, right? It's challenging to resource examinations, to adequately respond to exam inquiries. They're getting pinged by other regulators. They're getting pinged by both at the state and federal level, and in some cases, even international regulatory authorities. Meanwhile, they're also trying to conduct business and respond to customers and trying to take an objective look and say, how can we better bring firms into the fold kind of around how we plan for our examinations and bring efficiency to the overall process?
It was about a year ago that Robert Cook, FINRA CEO, stated in his blogs that member firms expend compliance resources in addition to business technology and operation resources around our examinations and other inquiries. It's our obligation to conduct robust oversight, but it's also our responsibility to do so in a way that avoids imposing the necessary burdens. So in January of this year, in partnering with J.'s organization and Corporate Comm and External Communications as well, we began an exam transparency process in which we started to notify member firms not only about this initiative, but also the quarter during which we plan to conduct an examination. Again, this change supports our FINRA Forward goals by providing firms greater visibility around resource planning and allocation while maintaining, of course, the flexibility we need for our risk-informed examination approach.
23:55 – 24:55
J. Koutros: Part of the reason why we also made the changes is we actually built an infrastructure that allowed us to evaluate our previous schedules to see how often firms moved from quarter to quarter to ensure that if we were being transparent and saying, “Hey, we're going to come in on this quarter,” that we actually would be able to maintain that commitment for a large portion. We recognize that we communicate to the industry there are other facts and circumstances that sometimes even the member firms request to move an examination outside of the original quarter that we had identified and we tried to accommodate all those as well. So I think we've also been able to build an infrastructure that allowed us to evaluate the past, but also, we built model using data and other things to establish the plan much sooner and allows us to communicate it. And we have set our goal to communicate before the start of the 2027 plan for 2027 so that this year that we missed the first quarter of examinations, but we're hoping that next year we'll be ahead of the game.
24:55 – 25:04
Margherita Beale: That's a great overview of some of the changes that are ongoing, but looking forward, what's on the horizon for the exams program?
25:04 – 28:49
John Martino: Our commitment to enhancing our exam program is really going to continue to drive our evolution. And in doing so, we want to continue to find ways in which we can adapt the latest technologies, whether that's leveraging generative AI or really looking to optimize the use of internal intelligence, which we've talked about a lot today.
So one of the things we're currently engaged in is we're working to move forward a more automated exam platform that our exam staff are using to engage and execute their examinations. And this system will better match our exam scope to the risk indicators to minimize manual documentation burdens on our member firms, while also mitigating duplicative requests. It's going to allow us to remove risks that other groups within FINRA may already have covered. So, as we continue to evolve and invest in a more proactive compliance mindset, we're also continuing, as Jim and J. were just talking about, increasing that transparency that we have with the industry. And one thing that we've just recently rolled out that a number of our members probably haven't yet had an opportunity to experience is the way in which we communicate our findings to the membership. And it's more specifically preliminary findings. So as we're going through the course of an exam and we're starting to uncover things that might be indications of a firm’s non-compliance with different rules and regulations, we want to ensure that the level of dialogue and transparency that we're having with the membership is robust. And that happens in many forms. It's through ongoing dialogue and communication, but our current practice is at the conclusion of the exam to then issue the firm a preliminary findings report that's really a consolidation of all of those findings. And what we've implemented recently is a shift in that we're giving firms an opportunity to the extent they would like to receive those findings in writing earlier on in the exam process or at the time in which they are finalized. So there are situations where maybe in some of our exams that extend for a longer period of time than others, where we may be drawing conclusions or reaching finality on certain findings earlier than other aspects of that examination. And we want firms to have the opportunity, should they select to have it, is to provide them those findings in writing earlier on or at the time that we've concluded that particular review.
And this, we believe, again, not only helps increase that level of transparency, but also helps firms take that information and make decisions internally as to what steps they may need to start to take as far as corrective action. It also gives them an opportunity to provide us potentially additional documentation or context that maybe we previously didn't have an opportunity to consider and really helps move some of that opportunity further into the exam process, allowing the firms to more proactively engage with us and address those issues more timely.
There's a lot of different things that, again, we're going to continue to focus on. And there's more to come. But this is just a little bit of insight into where we're continuing to dedicate our resources and where we're committed to continue to share updates with the industry. And as we were speaking about earlier, there's a desire for us to continue to receive feedback from the industry. And so we encourage our members to continue to share with us feedback and keep that level of dialogue open.
28:49 – 30:01
J. Koutros: Yeah, so I think that's an important point. I think a lot of the work that we've been doing has been based on making our program more efficient and effective. The correlation would be that it's better for them. The burden would be reduced on the member firms. But this year we are committed to taking the feedback that we've already received, but also doing a little bit more deeper dive into the tools that we provide member firms to interact with us during examination. And we're doing our due diligence to try to optimize their interaction with us. So this year we have committed a piece of our technology budget to ensure that we are getting proper feedback and doing discovery work to concentrate on 2027 to continue to enhance that interaction with member firms.
The only other piece, John hit a lot of the pieces that we're working o, we are using AI to help standardize certain things where we're able to use AI to ensure that there's some consistency in our program on how we write our exam reports or the information that we're delivering. There's been some enhancements in the AI space that helps us optimize and create a more consistent approach so that member firms can start seeing more consistent output from us rather than sometimes not as consistent.
30:01 – 31:02
Jim Reese: Yeah, so the theme really here is the member firm experience with FINRA as a whole. And obviously, examinations is just a piece of that. But across regulatory operations and FINRA enterprise, we're all very concentrated on that member firm experience and how we're a slice of that and how we fit in that ecosystem. But I think John did a good job going through examples where there's also optionality built into some of the things that we're trying to stand up. Realizing that, as we talked about earlier, there are different business models, business segments, regulatory staff prefer to interact with us in different ways. So we're trying to meet firms where they're at. And that's why that feedback is critically important. So we could have kind of that diverse as such of a spectrum and take those into consideration as we develop and not just kind of develop in a vacuum, and what we think is an efficiency actually turns out to be an ineffective practice with engagement in a member firm. And again, that goes across FINRA enterprise and how we collectively show up to a firm and how those components within exam and then across FINRA interact.
31:02 – 31:13
Margherita Beale: So, as we wrap up today, are there any final thoughts that you'd like to share on how firms should be thinking about these changes? Jim, why don't we start with you?
31:13 – 32:25
Jim Reese: Really our commitment and hopefully we got the point across today is around enhancing the examination program and to continue to drive our evolution. This includes future communications and publications like blogs. This Unscripted podcast is another example, looking for ways to share effective practices and observations with member firms, as well as enhance how we show up to member firms. As J. and John alluded to, right, how can we be consistent? How can we be impactful throughout an examination? How can we deal with issues earlier in our examination process? And we're focused on that feedback, whether it's next month at our Annual Conference, the Outreach that John talked about at our firm committee meetings, or other just engagement and feedback during an examination or up to your risk monitoring or a firm's risk monitoring analyst. We collect that, we footprint that out, and then we make a determinations around process, technology and training based on that. So it's engagement often and frequently, while at the same time delivering that risk-informed, better use of internal intelligence and information to scope our work and make it more applicable. But we can't do that without getting that feedback from our membership, which is critically important to our FINRA Forward evolution.
32:25 – 32:56
J. Koutros: We are doing a lot as everyone could hear to try to make the program more efficient and effective, but we know we're not gonna be perfect. All I could say is that we strive to be better each day. So the only way we can get better is by receiving some feedback, some constructive feedback on what worked and what didn't work. And our commitment is to continue to improve and continue to get better each day knowing that we will never be perfect and not everyone's gonna love the examination program or being examined, but we will try our best to make the experience as effective as possible.
32:56
John Martino: So J. and Jim really did a great summarizing and not to be duplicative, but please just encourage the membership to continue to share the feedback. It's that feedback that's really the foundation of our ability to continue to evolve, be efficient, and make sure that we're delivering the regulatory obligation that we have as a regulatory organization, as well as giving our firms the best experience that we can.
33:23 – 33:28
Jim Reese: And hopefully, Margherita, you'll have the three of us back again in the future to keep kind of sharing thoughts.
33:28 –33:55
Margherita Beale: Absolutely, we look forward to having you back. But for today, that's it for this episode. J., Jim and John, thank you so much for joining us and speaking on this important topic. Listeners, if you don't already, please be sure to subscribe to FINRA Unscripted wherever you listen to podcasts. All of the resources mentioned today will be included on the homepage for the episode. Today's episode was produced by me, Margherita Beale and engineered by John Williams. Until next time.
34:00 – 34:33
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