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November 30, 2017 at 04:46 AM
The Financial Industry Regulatory Authority plans to release by year end its first exam findings report and announce in the first half of 2018 how it plans to revamp its exam program, according to FINRA CEO Robert Cook.
“We’re looking at a series of process improvements in our examination program, particularly our ‘cycle’ examination program, with a view to announcing those sometime in the next few months,” Cook said Tuesday during a FINRA Unscripted webcast.
The self-regulator, Cook said, is also “taking a broader look at our exam programs. We have three different examination programs,” he explained, noting that some of the exam programs were “never fully merged” after FINRA was created in 2007 from the consolidation of the member regulatory functions of the National Association of Securities Dealers and the New York Stock Exchange.
“We’re looking at whether that would make sense to integrate those programs in some way or establish ways to make them more consistent. That’s a significant undertaking,” he said, which is akin to FINRA’s recent announcement that it was merging its enforcement groups.
“We’re still going through the process of figuring out what would be the right structure for the exam groups longer-term,” Cook said. “That will be something hopefully in the first half of next year we could announce a decision on.”
The exam revamp comes as part of the feedback FINRA has gotten from its top-to-bottom review of the regulatory organization via its FINRA360 initiative.
Susan Axelrod, head of regulatory operations — including FINRA’s exams — announced on Oct. 26 that she plans to depart the self-regulator to seek other opportunities in the private sector.
Axelrod will remain in her current post until Jan. 5, 2018, to help with a smooth transition and to continue to implement key organizational initiatives, according to FINRA. She will then assume the role of senior advisor to Cook through the end of April.
‘Cycle’ Exam Focus
Under FINRA’s cycle exams, BD firms are examined on a one- to four-year cycle. The cycle exams are distinct from “cause” exams, which are prompted by a particular issue.
