After getting approval from its board, the Financial Industry Regulatory Authority Inc. (FINRA) is moving ahead with several reform proposals — including rules to facilitate remote branch inspections, modernizing supervisory obligations and easing compliance costs for corporate finance activities.
At meetings earlier this month, FINRA’s board of governors approved a handful of new rule proposals, which will now be filed with the U.S. Securities and Exchange Commission (SEC) for its approval.
“These rule proposals reflect FINRA’s commitment to modernizing its regulatory framework while maintaining robust investor protections,” said FINRA chair, Scott Curtis, who was reelected at the meeting.
The planned reforms include a proposed rule that would make permanent a pilot program that allowed firms to conduct remote inspections and was scheduled to expire in 2027.
Additionally, the board approved a proposal that aims to modernize firms’ supervisory obligations and addresses inspection requirements for different types of locations. And, the self-regulatory organization is seeking reforms to continuing education requirements and firms’ training programs.
It’s also proposing changes to the rules around corporate finance activities, including compliance requirements for firms when dealing with conflicts of interest in public offerings, exemptions for private placements and the treatment of compensation from securities underwriting activities.
These changes are intended to reduce the compliance costs and regulatory burdens associated with capital raising, while maintaining investor protection, FINRA said.
“By embracing workplace flexibility through remote inspections, adopting risk-based supervisory approaches, tailoring continuing education requirements and streamlining corporate financing rules, we are reducing unnecessary regulatory burdens and costs,” Curtis said.
“These changes will help members operate more efficiently and focus their resources on managing their businesses while continuing to protect investors,” he added.
Additionally, FINRA said that the board discussed potential changes to its rules around the provision of research, and possible reforms to its arbitration mechanism — following a consultation that was completed earlier this year on a range of issues with the arbitration system.
The board also approved the SRO’s annual report, which will be published later this month.