Report From FINRA Board of Governors Meeting – December 2023

Board Approves Rule Proposals and FINRA’s 2024 Budget, Previews 2024 FINRA Annual Regulatory Oversight Report

WASHINGTON–(BUSINESS WIRE)–FINRA’s Board of Governors held its fifth and final meeting of the year on December 6-7. During the meeting, the Board approved two rule proposals and FINRA’s 2024 proposed budget, and continued discussions around FINRA’s financials, including expenses and the drawdown of reserves. The Board also appointed new members to the National Adjudicatory Council (NAC) and the Small Firm Advisory Committee (SFAC), and previewed the 2024 FINRA Annual Regulatory Oversight Report.

“This has been an impressive year for FINRA. Although there is more work to be done, we remain unwavering in our commitment to upholding FINRA’s important mission, which helps bring greater fairness and transparency to our industry,” said FINRA Board Chair Eric Noll.

The newly appointed members of the NAC and SFAC, as well as newly elected members of the NAC, SFAC and Regional Committees, will be announced via an Election Notice in the coming weeks. The NAC hears appeals of or reviews FINRA disciplinary cases. The SFAC ensures that issues of particular interest and concern to small firms are effectively communicated to and considered by the Board, including perspectives on how rule proposals could impact small firms. Regional Committees advise FINRA on industry trends of regulatory concern, provide input on the impacts of FINRA’s regulatory programs and communicate high-level information regarding meeting discussions to their constituents. Regional Committee members also serve as panelists in FINRA disciplinary proceedings.

FINRA anticipates publishing the 2024 FINRA Annual Regulatory Oversight Report — formerly known as the Report on FINRA’s Examination and Risk Monitoring Program — next month. The report provides FINRA member firms with key insights and observations from recent oversight activities of FINRA’s Regulatory Operations to use in strengthening their compliance programs.

Rulemaking

The Board approved the following rule proposals at the December meeting. General information about FINRA’s rulemaking process is available here.

• Applicability of Document Production Lists in Simplified Customer Arbitrations – The Board approved proposed amendments to the Code of Arbitration Procedure for Customer Disputes to clarify that Document Production Lists apply in simplified customer arbitrations in which the customer requests a regular hearing, and to give customers the option to request for Document Production Lists to apply in the remaining types of simplified arbitrations.

• Centralized Hosting of SEC Rule 605 Reports – The Board approved proposed rule amendments to require members to submit Regulation NMS Rule 605 execution quality reports to FINRA for central publication on the FINRA website.

The Board also received an update on FINRA’s National Cause and Financial Crimes Detection Program (NCFC) and FINRA’s recent cybersecurity activities, which include the recent release of several updated tools to assist firms with their ongoing cybersecurity efforts.

The next FINRA Board of Governors meeting is scheduled for March 6-7, 2024. More information regarding the Board’s operations, including the membership and responsibilities of its committees, is available here.

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 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.

Contacts

media@finra.org