Finra wants to ease membership application process, while still protecting investors

Finra wants to ease membership application process, while still protecting investors
New report details proposed changes in rules and material it requires from broker-dealers.
MAR 04, 2016
Finra is taking a fresh look at its membership rules and requirements to make the process easier for applicants, while still trying to ensure the financial firms they oversee are protecting investors. The Financial Industry Regulatory Authority Inc. said in a report issued Friday that its process of reviewing new membership applications and the material it requires when businesses make operational changes could be improved by considering the relative risk of the applicant and its operations to investors. (More: Finra asks 8 questions to asses a firm's culture) It also will propose new rules or otherwise issue new guidance on the extent of information requested by applicants and the nature of that material, the self-regulatory organization said in a statement that accompanied the 21-page report that examined current processes. "With this thorough assessment in hand, we will explore a combination of guidance, rule amendments and changes in process or technology that will help enhance the efficiency and effectiveness of the membership application program, while still serving its goal of investor protection," said Robert Colby, chief legal officer for Finra. The Finra report concludes that the group's existing rules have largely been effective at protecting investors. The report comes as Sen. Elizabeth Warren, D-Mass., has criticized Finra for failing to protect investors from the firms it's supposed to be overseeing. She cited an academic study that concluded one in 13 Finra-regulated brokers has committed misconduct that is part of their records. It also showed that 50% of advisers with ethical lapses are fired, but 44% of them are rehired within a year.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave