Report from FINRA Board of Governors Meeting – March 2021

Board Approves Rulemaking Item and Use of 2020 Fine Monies; Moves Forward With Advanced Analytics Strategic Initiative

WASHINGTON – FINRA’s Board of Governors met on March 3 and 4 for the first time in 2021. During the meeting, the Board approved one rulemaking item and discussed a variety of topics, including the evolution of FINRA's Member Supervision Department, which recently published the 2021 Report on FINRA’s Examination and Risk Monitoring Program.

As is customary for the first meeting of the year, the Board also approved the allocation of prior-year fine monies to various capital initiatives in accordance with FINRA’s Financial Guiding Principles, which the Board reaffirmed in December. FINRA plans 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 FINRA staff to better leverage these resources. The initiative will allow FINRA to identify potential misconduct more quickly, thus strengthening its ability to mitigate customer harm.

Rulemaking

Proposed Amendments to the Borrowing and Lending Rule – 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 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).

For general information about FINRA’s rulemaking process, see www.finra.org/rules-guidance/rulemaking-process.

The next FINRA Board of Governors meeting is scheduled for May 18-19, 2021. 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.