Finra allocated the money it collected in fines last year, totaling $48.1 million — augmented by funds from its reserves and operating revenue — to bolster its examination and enforcement efforts, the broker-dealer self-regulator announced Wednesday.
In its annual report on the use of its fine proceeds, the Financial Industry Regulatory Authority Inc. said that it collected $48.1 million in fines in 2022. But the organization determined there was a total of $111.4 million in projects that could be funded with fine monies, such as capital initiatives, investor education and reserves replenishment.
Finra dipped into its reserves — or investment accounts — and excess operating revenue to add $63.3 million to its $48.1 million in fines to finance the total $111.4 million in spending tied to fine collections.
The $111.4 million total was split in two ways. The regulator spent $89.2 million on capital initiatives to upgrade technology and data management to improve Finra’s oversight of member brokerages and their compliance with Finra rules. The other $22.2 million was allocated to investor education.
The $52.2 million spent on examinations and enforcement capital initiatives included $17.5 million to build a centralized data services and analytics platform. Another $17.1 million was invested in tools and systems to improve investigations of brokers with a history of misconduct. Other spending in this pool was targeted at digital aspects of enforcement and on risk monitoring.
Additional capital spending included more than $16 million to enhance Finra’s monitoring of market trading and $13.4 million to improve its compliance filing systems.
“The fines-eligible expenditures … furthered Finra’s goals to implement efficient oversight programs that protect investors and the markets; modernize critical securities industry infrastructure; strengthen the ability to track trading across markets; enhance examination, investigation and disciplinary programs; enhance the efficiency of Finra systems; facilitate compliance by member firms; equip investors with knowledge and resources to help them navigate ever-evolving markets, products and services; and expand training to ensure staff is prepared for new regulatory challenges,” Finra said in the report on how it spent fine proceeds.
Finra has issued the fine-spending report annually since 2017. It was originally published as part of the Finra 360 initiative to make the organization’s finances more transparent.
The Reddit trading community's formal comment letter against the proposal is drawing widespread attention across finance and tech circles.
RIA aggregator adds $4.8 billion in client assets across seven states as demand grows for alternatives to traditional succession models.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Shareholder targets FS KKR Capital's directors over alleged portfolio valuation and dividend missteps.
UBS has a history of costly litigation stemming from the sale of volatile investment products.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
