FINRA CEO Previews Enterprise Initiatives in ‘Spirit of Continuous Improvement’ Robert Cook, FINRA President and CEO, on Tuesday previewed the launch of several initiatives to aid member firms and investors by modernizing rules and oversight, eliminating unnecessary burdens and providing beneficial resources. “We’ve been about continuous improvement since I started at FINRA, anxious to figure out what more can we do, how can we change things, what can we improve. …So we are launching three initiatives that really are in that spirit,” Cook said while speaking at a seminar hosted by the SIFMA Compliance and Legal Society in Austin. These initiatives underscore FINRA’s unique role as a self-regulatory organization, particularly its ability to engage with members in ways that the federal government cannot and FINRA’s ability to perform crucial market functions that no single firm can. “[M]odernizing the rule book, figuring out how we can enable compliance, and how do we help partner with the industry to fight fraud and cyber risk — those are some of the initiatives that you’ll be hearing more about from us in the coming weeks,” Cook said. “We really welcome input from you on how we can best implement them, or other things you think we ought to be working on.” The initiatives he previewed, and will detail in the coming weeks, are: - Undertaking a broad review to modernize requirements and eliminate unnecessary burdens. This was announced in a March 12 Regulatory Notice, which detailed two areas of focus: capital formation and modern workplace practices. “Rules need to be updated. We need to take a fresh look at them. We do that from time to time, but we’re stepping back and inviting people to tell us which rules they think need the most attention, and we welcome your comments on that,” Cook said.
- Enhancing how FINRA supports member firm compliance to better protect investors and safeguard markets. FINRA aims to achieve this by expanding its compliance resources into actionable tools for member firms, strengthening the feedback loop from FINRA’s regulatory programs and reviewing oversight activities to remove outdated or unnecessary demands on firm compliance. “To the extent we can reduce those kinds of burdens on firms while maintaining investor protection, that's an opportunity for us,” Cook said.
- Expanding FINRA’s cybersecurity and fraud prevention services to enhance member firms’ risk management capabilities and resilience against emerging threats and to better protect them from harm. This includes establishing the FINRA Financial Intelligence Fusion Center as a dedicated center to collect, analyze and disseminate cybersecurity and fraud threat intelligence in real-time. FINRA will “really push hard on playing a proactive role in helping firms combat cyber risk and fraud risks. It’s a huge problem. It takes an everyone-on-board kind of approach. We’re going to roll out some new services including creating an intelligence fusion center so that firms can report information to us, and we can push it back out to firms,” Cook said.
Features |
- Cook Blog: “Eliminating All PII from CAT”
In a blog last week, FINRA President and CEO Robert Cook detailed his support for the Consolidated Audit Trail (CAT) LLC’s proposed amendment with the SEC. The proposal would formally amend CAT to stop the reporting of all personally identifiable information (PII), and delete any PII previously reported to CAT. CAT is an SEC-mandated reporting system that collects data regarding trading in the U.S. equities and options markets.
- Proposed Rule Change to Exempt Certain Business Development Companies
On March 20, FINRA filed with the SEC a proposed rule change to exempt certain business development companies from FINRA Rule 5130 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings) and from paragraph (b) (Spinning) of FINRA Rule 5131 (New Issue Allocations and Distributions).
- Request for Comment on Capital Formation
On March 20, FINRA published Regulatory Notice 25-06 requesting comment on modernizing FINRA rules, guidance and processes to further facilitate capital formation and reduce unnecessary regulatory costs and burdens on the capital-raising process. The Notice seeks comment in several specific areas, namely capital acquisition brokers and other limited purpose broker-dealers, research and rules and Regulatory Notices setting standards for members’ supporting capital formation. Comments are due by May 19.
- ICYMI: Request for Comment on Rule Modernization
On March 12, FINRA published Regulatory Notice 25-04 requesting comment in connection with a broad review of its regulatory requirements applicable to member firms and associated persons. To begin this review, FINRA has identified capital formation and the modern workplace as two initial areas of focus. Interested parties may also comment on other areas FINRA should consider as part of this review. Comments are due by May 12.
- ICYMI: Request for Comment Regarding Outside Activities Requirements
On March 14, FINRA published Regulatory Notice 25-05 requesting comment on a proposed new rule to streamline and reduce unnecessary burdens regarding existing requirements for the outside activities of member firms’ associated persons, including registered persons. The proposal would replace two rules—Rule 3270 (Outside Business Activities of Registered Persons) and Rule 3280 (Private Securities Transactions of an Associated Person)—with one rule and is intended to enhance efficiency without compromising protections for investors and members relating to outside activities. Comments are due by May 13.
- ICYMI: Two SEC Orders on FINRA Proposed Rule Changes
The SEC issued two orders instituting proceedings to determine whether to approve or disapprove FINRA’s proposed rule changes.
- The first order, issued March 10, concerns FINRA’s proposed rule change to amend the Codes of Arbitration Procedure by making changes to certain provisions relating to the arbitrator selection process. Comments are due by April 4 and rebuttal comments are due by April 18.
- The second order, issued March 12, concerns FINRA’s proposed rule change to amend the Codes of Arbitration Procedure to add new rules to accelerate the processing of arbitration proceedings for parties who qualify based on their age or health condition. Comments are due by April 8 and rebuttal comments are due by April 22.
- ICYMI: Texas and Washington Join States Accepting RSLs
As of last week, Texas’ and Washington’s Form BR settings were updated to reflect that they now accept Residential Supervisory Locations. The Jurisdiction Fee and Setting Schedule has been updated accordingly.
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Guidance, Upcoming Deadlines, Effective Dates |
New - Request for Comment on Capital Formation: Read the feature above for more information on FINRA’s recently published Regulatory Notice 25-06, which requests comment on modernizing FINRA rules, guidance and processes to further facilitate capital formation and reduce unnecessary regulatory costs and burdens impacting the capital-raising process. Comments are due by May 19.
Reminders - Four New Forms in FINRA Gateway: Visit FINRA’s website for more information about the new forms that are now available in FINRA Gateway. The compliance date for using them is March 31.
- 2025 GASB Accounting Support Fee: FINRA will assess and collect a total of $17,298,100 to fund the Governmental Accounting Standards Board’s budget by collecting $4,324,525 from member firms each calendar quarter beginning in April. Firms are reminded that if they choose to pass along the fee to customers, they must ensure proper disclosure.
- SEC Request for Comment: The SEC issued an order on March 10 instituting proceedings to determine whether to approve or disapprove FINRA’s proposed rule change to amend the Codes of Arbitration Procedure to make changes to certain provisions relating to the arbitrator selection process. Comments are due by April 4 and rebuttal comments are due by April 18.
- SEC Request for Comment: The SEC issued an order on March 12 instituting proceedings to determine whether to approve or disapprove FINRA’s proposed rule change to amend the Codes of Arbitration Procedure to add new rules to accelerate the processing of arbitration proceedings for parties who qualify based on their age or health condition. Comments are due by April 8 and rebuttal comments are due by April 22.
- Military Spouse Fellowship Application: The FINRA Investor Education Foundation and the Association for Financial Counseling and Planning Education are accepting applications for the 2025 class of FINRA Foundation Military Spouse Fellows, which offers eligible military spouses the opportunity to earn the Accredited Financial Counselor® (AFC®) certification. Applicants can apply online until April 15.
- Comment on Metaverse Report: FINRA is seeking comments to its report, “The Metaverse and the Implications for the Securities Industry,” from firms and other market participants until April 25.
- Amendments to FINRA Rule 3240: Amendments to FINRA Rule 3420 (Borrowing From or Lending to Customers) go into effect April 28 to strengthen the rule’s general prohibition against borrowing or lending arrangements between registered persons and their customers, narrow some exceptions, modernize the “immediate family” definition, and more.
- Web EFT Retirement: The legacy Web EFT service and all associated XML file upload and download functionality will be completely retired on April 30. Current Web EFT subscribers wishing to continue making automated data transfers with FINRA must have completed transitioning to the FINRA API platform by that date. Please contact FINRA immediately if your firm has questions or concerns about the Web EFT retirement.
- Request for Comment on Rule Modernization: Read the feature above for more information about FINRA’s Regulatory Notice 25-04 requesting comment in connection with a broad review of its regulatory requirements applicable to member firms and associated persons. Comments are due by May 12.
- Request for Comment Regarding Outside Activities Requirements: Read the feature above for more information about FINRA’s recently published Regulatory Notice 25-05 requesting comment on a proposal to replace two rules—Rule 3270 (Outside Business Activities of Registered Persons) and Rule 3280 (Private Securities Transactions of an Associated Person)—with one rule and is intended to enhance efficiency without compromising protections for investors and members relating to outside activities. Comments are due by May 13.
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Disciplinary Actions |
- FINRA publishes disciplinary actions to remind members of specific conduct that violates FINRA rules and may result in disciplinary action. The March 2025 Monthly Disciplinary Actions are available here.
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Education and Compliance Programs |
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Resources |
Member Firm Hub – The latest guidance, resources, educational opportunities and more. Membership Application Program (MAP) Tools – Guidance and other resources to help current members prepare for their continuing membership application (CMA) and new applicants prepare for a new member application (NMA). FINRA Unscripted – A biweekly podcast that discusses a range of topics important to the securities industry. |
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About FINRAFINRA is a not-for-profit organization dedicated to investor protection and market integrity. FINRA regulates one critical part of the securities industry—member brokerage firms doing business with the public in the U.S. 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. |
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