Report From FINRA Board of Governors’ September Meeting

Board Approves Four Rule Proposals as Part of FINRA Forward Rule Modernization

WASHINGTON--(BUSINESS WIRE)--At its meeting Sept. 29-30, the FINRA Board of Governors approved four rule proposals for filing with the SEC and received briefings on key initiatives, including FINRA's ongoing rule modernization efforts.

The rule proposals reflect stakeholder feedback received through FINRA Forward, an ongoing effort to improve FINRA's effectiveness and efficiency in pursuing its mission of investor protection and market integrity.

"These rule proposals underscore FINRA's continued commitment to refreshing the regulatory framework applicable to member firms, markets and investors. They focus membership application reviews more closely on risk, provide greater flexibility in meeting certification deadlines and eliminate an outdated quoting requirement, among other improvements. Together, they illustrate how FINRA is taking meaningful steps to enhance efficiencies while preserving the investor protections that are central to FINRA's mission," said FINRA Board Chair Scott Curtis.

Rulemaking

The following rule proposals will be filed with the SEC:

• Membership Application Review: The proposal would amend rules governing FINRA's review of new and continuing membership applications to better focus on risk.
• CEO Certification Deadline Flexibility: The proposal would make the annual CEO compliance and supervisory processes certification deadline more flexible.
• Rescission of the Same Quote Rule: The proposal would rescind the Same Quote Rule requiring members to display the same price for any over-the-counter equity security that they quote across multiple platforms.
• Mutual Fund Cash Compensation Disclosure: The proposal would repeal a mutual fund prospectus cash compensation disclosure requirement in light of its overlap with the SEC’s Regulation Best Interest and other disclosure rules.

Information about FINRA's current priorities, active rule filings and recently approved or immediately effective rule filings is detailed in the FINRA Quarterly Regulatory Policy Agenda.

Governance and Oversight

The Board received several briefings on key initiatives as part of its oversight of management and the administration of FINRA's work. These included updates on FINRA's AI strategy, market surveillance program, cyber and information security program, rule modernization initiative and the recent integration of several teams into a unified Regulatory Operations division.

Executive Vice President and Head of Enforcement Bill St. Louis briefed the Board on steps FINRA is taking to address recommendations from the recent external review of the Enforcement Program. The briefing is part of our response to the report’s call for FINRA to engage the Board in more frequent discussions on the program. With budget planning for 2027 underway, the Board received updates on FINRA's finances, including recent measures to address surplus reserves.

More information about the Board's operations, including its membership and the responsibilities of its committees, is available here.

About FINRA

FINRA is a not-for-profit organization dedicated to investor protection and market integrity. FINRA regulates one critical part of the securities industry—member brokerage firms doing business in the U.S. 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.