The regulator is soliciting input on the “operational and technology implications of rule changes.”
The Financial Industry Regulatory Authority (FINRA) reports that it is making changes to its advisory committees intended to “increase transparency around the committees and improve their effectiveness as a vehicle for firms to provide input on key issues before FINRA, including on existing and proposed rules.”
Also, early in the new year, the regulatory authority intends to “introduce an online portal to enable registered representatives to begin the process of serving on committees.”
Furthermore, it will conduct a “review of its advisory and district committees to determine if further changes are appropriate.”
The imminent changes, billed as the first phase of a series of FINRA board of governors’ transparency effort, are part of FINRA360, an “organizational improvement initiative,” and are meant to “address feedback FINRA received in response to a Special Notice on its engagement programs issued in March [2017].”
The specific transparency steps that FINRA is taking include the following:
- Increasing both the “authority and membership” of the operations advisory committee to include “providing input on operational and technology implications of rule changes;”
- Publishing lists of the membership of each advisory committee at finra.org;
- Providing more detail in FINRA’s rule filings and regulatory notices about the committees that reviewed the proposals; and
- Publishing an annual notice “about the committees and the application process to become a committee member.”
Also, FINRA is pointing out that its new online page “centralizes information on FINRA’s governance and corporate structure, and “lists members of FINRA’s Board of Governors, a calendar of upcoming Board meetings, as well as governance documents and Board communications.”
“Meaningful conversation with member firms to leverage their expertise and hear their perspective on critical issues is a key part of any successful self-regulatory organization,” Marcia Asquith, FINRA executive vice president for board and external relations, observes in the authority’s statement.
FINRA, which is 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.”
FINRA notes that it currently has “16 advisory committees that provide feedback on rule proposals, regulatory initiatives and industry issues. More than 160 industry members and 35 non-industry members serve on these committees. The advisory committees meet in-person or via teleconference typically between two and five times a year.”
FINRA expects that it will unveil additional changes following its December 13-14 board of governors meeting.
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