Board Approves 2020 Annual Financial Report; Adopts Advisory Committee Term Limits in Support of Greater Diversity and Inclusion
WASHINGTON – FINRA’s Board of Governors met on May 18-19, 2021. During the meeting, the Board approved FINRA’s 2020 Annual Financial Report, which—for the first time—will include a section on human capital describing the diversity of the self-regulatory organization’s workforce and Board of Governors. The report will be published this summer.
At the May meeting, the Board also approved a FINRA proposal to adopt term limits for members of its advisory committees—the 12 committees totaling almost 200 industry and non-industry participants who provide feedback to FINRA on rule proposals, regulatory initiatives and industry issues—that currently do not have term limits. With the Board’s approval, members of advisory committees will now serve a maximum of two three-year terms, with an additional three-year term for chairpersons and the potential for an additional one-year extension for members on a limited basis. The adoption of these term limits was a recommendation of FINRA’s Racial Justice Task Force to facilitate greater diversity on these committees and improve opportunities for those who are interested in serving.
“FINRA’s advisory committees provide critical expertise that enhances FINRA’s ability to develop rules and implement operations that best meet the needs of the investing public and a vibrant industry,” said FINRA President and CEO Robert Cook. “Adopting term limits will help ensure that FINRA continually receives feedback that represents the diverse experiences and perspectives of industry participants and the customers they serve.”
In addition, the FINRA Board approved a reallocation of the fees for the Regulatory Element of FINRA’s continuing education (CE) program, which is required training for all FINRA-registered persons that covers compliance, regulatory, ethical and sales practice standards. At its December 2020 meeting, the Board approved a proposal to require registered persons to complete the Regulatory Element of the CE program every year rather than every three years; the proposal the Board approved at its May meeting adjusts the fees from $55 every three years to $18 per year to conform with the proposed annual CE requirement. The revised schedule and fee change must be filed with the SEC before going into effect.
The next FINRA Board of Governors meeting is scheduled for July 21-22, 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.