Report From FINRA Board of Governors Meeting – March 2023

Board Approves Rule Proposal to Shorten the Securities Settlement Cycle to T+1 Consistent with Recent SEC Rule Changes, and Allocation of 2022 Fine Monies

WASHINGTON--(BUSINESS WIRE)--FINRA’s Board of Governors met on March 9-10 for the first time in 2023. The board approved a rule proposal to amend FINRA rules to conform to the SEC’s rule changes to shorten the securities settlement cycle and discussed a variety of regulatory topics and technology initiatives.

The board discussed a retrospective review of FINRA’s recently completed Digital Experience Transformation, a multi-year program that integrated and simplified brokerage firms’ digital interactions with FINRA, facilitating more innovative, efficient and effective compliance programs. In addition, the board discussed FINRA’s Regulatory Operations and Membership Application Program.

As is customary for the first meeting of the year, the board approved the allocation of prior-year fine monies to various capital initiatives in accordance with FINRA’s Financial Guiding Principles. FINRA will release details about the allocations in an upcoming Report on the Use of 2022 Fine Monies.

“At FINRA, fines are collected and accounted for separately from monies designated in our operating budget, and their use is subject to special governance procedures, use restrictions and transparency requirements,” said FINRA President and CEO Robert Cook. “Just as in prior years, we look forward to publishing details on the board-approved initiatives these fine monies will fund.”

Rulemaking Item Approved at the March 2023 Board Meeting

The board approved the following rule proposal:

• Proposal to Shorten the Securities Settlement Cycle to T+1 Consistent With Recent SEC Rule Changes – The proposal would amend FINRA’s rules to support a shortened settlement cycle from two business days after the trade date (T+2) to one (T+1) for U.S. securities transactions in the secondary markets, consistent with the rule changes and implementation cycle adopted by the Securities and Exchange Commission, other self-regulatory organizations and market participants.

For general information about FINRA’s rulemaking process, see www.finra.org/rules-guidance/rulemaking-process.

The next FINRA Board of Governors meeting is scheduled for May 17-18, 2023. More information regarding the Board's operations, including the membership and responsibilities of its committees, is available at www.finra.org/governance.

About FINRA

FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.