FINRA has just announced the launch of FINRA Forward – what it labels a series of initiatives to improve its effectiveness and efficiency in pursuing its mission. 

In a blog post Robert Cook, FINRA’s president and CEO, said FINRA Forward will mainly focus on “capitalizing and building on recent enhancements to its regulatory programs and technology capabilities; supporting further innovation in financial services; and ensuring regulatory policies are tailored to the opportunities and risks of the current market, business, and technology environment.”

The three FINRA Forward initiatives are:

• Modernizing FINRA Rules – a broad review of its rules to modernize requirements, facilitate innovation and eliminate unnecessary burdens. 
   
• Empowering Member Firm Compliance – working to enhance how it supports member firm compliance to better protect investors and safeguard markets.
   
• Combating Cybersecurity and Fraud Risks – is expanding its cybersecurity and fraud prevention activities to support member firms’ risk management capabilities and resilience against emerging threats and to better protect member firms and their investors from harm.

Modernizing rules

In the interest of being open to revisiting regulatory standards to adjust to changes in markets, products, services and risks, Cook says FINRA “recently launched a new rule modernization initiative through Regulatory Notice 25-04, which solicits feedback regarding which areas of our rules warrant updating.” This particular request for comment is broad in scope; it seeks comments about areas of the FINRA rulebook on which the agency should focus, such as by modernizing, tailoring, enhancing, or eliminating requirements.

FINRA also recently issued requests for comment through Regulatory Notice 25-06 on promoting capital formation and requested comment via Regulatory Notice 25-07 on supporting modern firm workplaces.

Empowering compliance

FINRA has developed other resources for member firms to assist their compliance functions, Cook noted in his blog post. He lists conferences and other events, compliance guides and checklists, plus more tailored support focused on firms with relatively fewer resources.

But he says FINRA can do more to empower member firm compliance, adding that the agency will offer additional actionable compliance resources –such as events and other tools and resources focused on specific topics and challenges, designed for member firms of varied sizes and business models.

Second, the agency will focus on strengthening the constructive feedback loop from FINRA’s regulatory programs to its members. He explains that this means the agency will share the information it gleans from its regulatory work – such as its standard examinations and more narrowly tailored investigations to inform firms about compliance risks or issues at specific firms or across multiple firms, some of which may not be known without this insight.

Third, Cook says FINRA will focus on reducing unnecessary burdens on member firms that arise from how FINRA conducts its oversight activities, without compromising the effectiveness of its regulatory functions. Its examinations, investigations, information requests, membership applications, and other directives and activities can require member firms to expend compliance, operations, personnel and technology resources.

Cook said FINRA will continue considering and asking firms about whether there are more efficient ways in which relevant regulatory objectives can be met.

Combating cybersecurity and fraud

Cook also drew attention to FINRA’s establishment of “a Financial Intelligence Fusion Center as a dedicated program charged with collecting, analyzing, and disseminating cybersecurity and fraud threat intelligence to member firms in real-time through a secure portal.

“The Center will leverage internal and external intelligence sources to provide member firms with actionable insights on emerging risks and focus on supporting small and mid-sized firms that lack dedicated intelligence capabilities.”

He said the agency is also “expanding its information sharing with firms to provide curated intelligence and strategic insights to enhance cybersecurity preparedness by focusing on current, potential threats to all firms, plus ones that are tailored to the business models and vendor relationships of member firms.”

FINRA will also be “seeking to expand our offerings of tabletop exercises and other tools designed to give member firms practical experience with addressing cybersecurity and fraud threats.”