March 2021 Board Update

FINRA’s Board of Governors met on March 3 and 4, when it approved proposed amendments to FINRA’s Borrowing From or Lending to Customers Rule, approved the allocation of 2020 fine monies to various capital initiatives in accordance with FINRA’s Financial Guiding Principles, and moved forward with an advanced analytics strategic initiative.

March 10, 2021

FINRA’s Board of Governors met virtually last week, and I am pleased to share some updates from our discussions.

The Board approved the publication of a Regulatory Notice soliciting comment on proposed amendments to FINRA Rule 3240 (Borrowing From or Lending to Customers) resulting from a recent Retrospective Rule Review. The proposal seeks to strengthen the general prohibition of the rule, narrow or update some exceptions, and align the rule more closely with recently adopted FINRA Rule 3241 (Registered Person Being Named a Customer's Beneficiary or Holding a Position of Trust for a Customer).

As is customary for the first meeting of the year, the FINRA Board also approved the allocation of prior-year fine monies to various capital initiatives in accordance with our Financial Guiding Principles, which the Board reaffirmed in December. We plan to release details about the allocations in an upcoming Report on the Use of 2020 Fine Monies.

In addition, the Board approved an advanced analytics strategic initiative designed to enhance the tools and techniques FINRA utilizes to process data from regulatory and public sources, and provide additional training to our staff to better leverage these resources. The initiative will allow us to identify potential misconduct more quickly, thus strengthening our ability to mitigate customer harm. 

Our next meeting is May 18-19. More information regarding the Board's operations, including the membership and responsibilities of its committees, is available at www.finra.org/governance. 

Sincerely,

Robert W. Cook
President and CEO