Board Approves Rule Proposals and FINRA’s 2023 Budget, Previews 2023 Report on FINRA’s Examination and Risk Monitoring Program
WASHINGTON—FINRA’s Board of Governors held its fifth and final meeting of the year on Dec. 14-15. During the meeting, the Board approved two rule proposals and FINRA’s 2023 proposed budget, appointed members to the Small Firm Advisory Committee (SFAC) and National Adjudicatory Council (NAC), and previewed the 2023 Report on FINRA’s Examination and Risk Monitoring Program.
The newly appointed members of the SFAC and NAC, as well as recently elected members of the SFAC and Regional Committees, were announced last week via an Election Notice. The SFAC ensures that issues of particular interest and concern to small firms are effectively communicated to and considered by FINRA, including perspectives on how rule proposals could impact small firms. The NAC hears appeals of or reviews FINRA disciplinary cases and maintains the organization’s Sanction Guidelines. Regional Committees advise FINRA on industry trends of regulatory concern, provide input on the impact of FINRA’s regulatory programs and communicate high-level information regarding meeting discussions to their constituents.
FINRA anticipates publishing next month the 2023 Report on FINRA’s Examination and Risk Monitoring Program that was previewed by the Board. The report provides firms with insight into findings from recent oversight activities of FINRA's Regulatory Operations to help inform the development and operation of firms’ compliance programs.
Rulemaking
The Board approved the following rule proposals at the December meeting. General information about FINRA’s rulemaking process is available on FINRA’s website.
- Amendments to the Codes of Arbitration Procedure – The Board approved the submission to the SEC of proposed amendments to the Codes of Arbitration Procedure to make clarifying, technical and procedural changes to the arbitrator selection process. The amendments would codify current practices and guidance relating to arbitrator selection and increase selection opportunities for public arbitrators who are not chair-qualified.
- Amendments Regarding Video Conference Hearings Before the Office of Hearing Officers (OHO) and the NAC – The Board approved the submission to the SEC of proposed rule amendments to make permanent the temporary rules that allow video conference hearings in disciplinary proceedings and appeals that were adopted during the COVID-19 pandemic, with some modifications. The amendments would provide OHO and the NAC with authority to order video conference hearings, either by order of the adjudicator on its own or on motion of the parties.
The next FINRA Board of Governors meeting is scheduled for March 9-10, 2023. More information regarding the Board's operations, including the membership and responsibilities of its committees, is available at www.finra.org/governance.
About FINRA
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.