Finra will consolidate examination, risk-monitoring programs

Finra will consolidate its examination and risk-monitoring programs in an effort to make oversight of its member firms more efficient and effective, the regulator announced Monday.

The Financial Industry Regulatory Authority Inc. said in a statement that it would unify the examination programs responsible for business conduct, financial and trading compliance, and “create a single point of accountability for the examination of firms.”

The regulator said that the streamlined structure will better target examinations to the “risk profile and complexity of member firms.”

The consolidation is being led by Bari Havlik, Finra;s executive vice president of member supervision, who joined Finra in April from the Charles Schwab Corp., where she was senior vice president and chief compliance officer.

“By directing our expertise and resources in a more tailored way, we will become more effective at examining for compliance,” Finra president and chief executive Robert W. Cook said in the statement. “Bari brings valuable perspective to her role at the helm of this transformation and, under her leadership, we have begun to create and implement a roadmap that thoughtfully and methodically builds towards the new structure.”

In the statement, Ms. Havlik said that the exam program reform emanates from Finra 360, the regulator’s self-assessment, which has been underway for more than a year.

Last week, Ms. Havlik told an audience at the Financial Services Institute Forum in Salt Lake City that Finra is educating its examiners on member firms’ business models in order to improve the quality of exams.

She said Finra is also working to reduce the length of exams, interpret exam results more consistently and provide more transparency about how it targets firms for exams based on the risks the firms pose.

Finra regulates more than 3,700 brokerages and 630,000 registered representatives.

Related Topics: Financial Industry Regulatory Authority