Finra to overhaul broker information system, cut compliance costs for broker-dealers

The overhaul of the information system is intended to cut compliance costs for firms as well as make the registration and disclosure process more efficient

Jun 14, 2018 @ 11:20 am

By Bruce Kelly

The Financial Industry Regulatory Authority Inc. said Thursday it is going to overhaul its registration and disclosure programs, starting with a new web-based system for the data that provides the backbone for BrokerCheck, a database of hundreds of thousands of licensed securities sales people and executives.

Called the Central Registration Depository, the CRD is the central licensing and registration system that Finra operates for the U.S. securities industry and its regulators. BrokerCheck is often the first snapshot of a broker's work history that a potential client can see when considering investing with that broker.

According to a statement from Finra, a new WebCRD program highlighting important information and activities requiring immediate attention of firms, branches and individuals takes effect at the end of this month.

The overhaul of the information system has the objective to cut compliance costs for firms as well as make more efficient the registration and disclosure process of the roughly 630,000 licensed securities sales people, employees and executives, according to Finra.

"The transformation will allow Finra to develop systems that help firms effectively maintain compliance programs and reduce compliance costs, while continuing to operate and enhance BrokerCheck as an essential tool for investors," said Finra CEO Robert Cook in the statement.

Finra expects the overhaul to be completed in 2021.The changes focus on the CRD system, which is used primarily by industry professional and not consumers, and will not likely result in broad changes to BrokerCheck.

With the new WebCRD program, a compliance executive should be able to more efficiently sift through information about reps' work histories, such as where they stand with continuing education requirements, according to Finra.

Finra has been looking at its operations, including its disclosure programs, as part of a broad review called Finra 360.


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