WASHINGTON – FINRA’s Board of Governors met on Sept. 24-26 at FINRA’s offices in New York, where it approved six rule proposals and received several operational updates from FINRA staff.
The Board continued its engagement with key stakeholders by meeting with two officials from the Securities and Exchange Commission (SEC): Pete Driscoll, Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE); and Kevin Goodman, Associate Director of OCIE’s FINRA and Securities Industry Oversight (FSIO) group. The FINRA Board often hosts SEC officials and various stakeholders during a portion of its Board meetings, and Driscoll and Goodman last met with the FINRA Board in May 2018.
“The SEC’s oversight of FINRA is critical to our effectiveness as a self-regulatory organization, and we continue to work closely regarding our respective examination activities,” said FINRA CEO Robert W. Cook. “We appreciate that Pete and Kevin could join us to continue the discussion around our ongoing interactions with the Commission.”
The Board approved six rule proposals to be published by FINRA for comment or filed with the SEC (see FINRA’s rulemaking process for more information):
Proposed Amendments Permitting Dissemination of Aggregated TRACE Data for U.S. Treasury Securities – The Board approved proposed amendments to permit FINRA to publish aggregated volume information on U.S. Treasury Securities, in accord with the recommendation of the U.S. Department of the Treasury. FINRA member firms began reporting transactions in U.S. Treasury Securities to TRACE in July 2017, but FINRA does not currently publish any aggregated volume or transaction data on Treasury Securities. The proposed amendments will next be filed with the SEC.
Proposed Amendments to the Code of Procedure to Compensate Hearing Panelists – The Board approved proposed amendments to the Code of Procedure relating to the compensation of members of a Hearing Panel. Currently, industry panelists in extended hearings are paid—because of the length of these hearings—whereas panelists in regular hearings are not. The proposal amends the procedural rules for hearings to provide payment of all panelists regardless of the length of the hearing. The proposed amendments will next be filed with the SEC.
Proposed Amendments to Capital Acquisition Broker Rules – The Board approved publication of a Regulatory Notice seeking comment on proposed amendments to the Capital Acquisition Broker Rules to revise various aspects of the rules applicable to CABs based on experience with the rules.
Proposed Rule to Require Firm Approval of a Registered Person Being a Beneficiary, Executor, or Trustee, or Having a Power of Attorney or Similar Position of Trust for, or on Behalf of a Customer – The Board authorized FINRA to publish a Regulatory Notice soliciting comment on a proposed new rule to require firm approval of a registered person being a beneficiary, executor, or trustee, or having a power of attorney or similar position of trust for or on behalf of a customer.
Proposed Changes to the Codes of Arbitration Procedure Relating to Requests to Expunge Customer Dispute Information – The Board approved proposed amendments to the Codes of Arbitration Procedure to create, among other things, a roster of arbitrators with enhanced training and experience from which a panel would be selected in certain instances to decide an associated person’s request to expunge customer dispute information. The proposed amendments will next be filed with the SEC.
Proposed Amendments Enhancing Requirements for Inter-Dealer Quotation Systems That Display Quotes in Unlisted Equity Securities – The Board approved proposed amendments to enhance requirements for inter-dealer quotation systems that display quotes in unlisted equity securities. The proposed amendments will next be filed with the SEC.
More information regarding the Board's operations, including the membership and responsibilities of its committees, is available at www.finra.org/governance.
FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.