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November 11, 2014 at 09:36 AM
The Financial Industry Regulatory Authority is moving ahead with its controversial plan to collect broker-dealer account data through its Comprehensive Automated Risk Data System (CARDS) program as FINRA is “getting to problems where investors are severely harmed too late,” and is “testing” the impact of its broker recruitment compensation plan, Richard Ketchum, the self-regulator’s CEO, said Monday.
Speaking at the Securities Industry and Financial Markets Association’s annual conference in New York during a question-and-answer session with Ira Hammerman, SIFMA’s executive vice president and general counsel, Ketchum also said FINRA will send out sometime this week an “anonymous” questionnaire from a third party to broker-dealers in order to get their feedback on FINRA’s exam program.
“We are interested in what burden we are imposing and whether we are focused on the right things or not,” Ketchum said.
Comments on FINRA’s second iteration of its CARDS proposal are due by Dec 1.
Ken Bentsen, SIFMA’s president and CEO, said Monday at the SIFMA event that SIFMA opposes CARDS. Hammerman added during his Q&A session with Ketchum that SIFMA “will have a comprehensive solution” for FINRA regarding CARDS by Dec. 1.
Rep. Scott Garrett, R-N.J., chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, told FINRA in mid-October to hold off on its “costly and burdensome” CARDS plan.
“After a preliminary reading of the proposed rule, I remain far from convinced that this new, costly and burdensome proposal is needed,” Garrett said in his October statement.
Ketchum also said that FINRA hopes to seek amendments to the two rules — communications with the public and its gifts, gratuities and noncash compensation rules — the self-regulator was reviewing as part of its retrospective review.
