In a recent address at a Securities Industry and Financial Markets Association (SIFMA) event, FINRA President and CEO Robert Cook outlined a forward-looking agenda designed to strengthen industry compliance while reducing unnecessary regulatory burdens. These initiatives reflect FINRA’s ongoing commitment to modernize oversight in a way that aligns with today’s rapidly evolving financial services landscape.
Modernizing Rules for a Changing Industry
A central component of this initiative is a comprehensive review of existing rules and regulatory expectations. FINRA intends to modernize requirements surrounding capital formation and workplace practices—areas that have been significantly impacted by digital transformation and the rise of hybrid work models. This includes a fresh look at how firms handle internal communications, supervise remote employees, and engage with clients, with the goal of aligning rules more closely with current business realities.
Enhancing Cybersecurity Coordination
Another major area of focus is cybersecurity. As threats grow in sophistication, FINRA is developing a framework that will allow firms to report cyber incidents more easily and share critical information across the industry. While still in development, this initiative aims to build a more coordinated response to cyber risks, and some aspects may require approval from the Securities and Exchange Commission (SEC).
Reducing Compliance Costs
FINRA is actively seeking to identify sources of needless compliance costs from its supervisory work, such as unnecessary information demands and duplicative data requests. The regulator views reducing these kinds of frictions as an opportunity to ease regulatory burdens while maintaining investor protection.
What This Means for Compliance Professionals
For compliance teams, FINRA’s evolving approach presents an important opportunity to reassess internal procedures. By staying ahead of these changes, particularly in areas like supervision, communications, and cybersecurity—firms can position themselves to meet new standards while potentially benefiting from streamlined regulatory requirements.
Compliance professionals should monitor forthcoming notices and reports from FINRA, as the regulator will soon provide more detailed guidance on these initiatives and how firms can prepare for implementation.
