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FINRA Revamps Advisory Committees, Adds 2 New Ones

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The Financial Industry Regulatory Authority said Thursday that it has made a series of changes to its advisory committees and added two new ones to focus on “specialized issues” involving clearing firms and capital acquisition brokers.

The self-regulator also published Thursday a Special Notice, dubbed its first annual Involvement Notice, which asks member broker-dealer firms to get involved in voicing feedback on FINRA’s programs — as part of FINRA CEO Robert Cook’s FINRA360 initiative — and details the process for filling vacancies on various FINRA ad hoc and advisory committees, the National Adjudicatory Council, District/Regional Committees and FINRA’s Board.

Also launched was an Engagement Portal for member firms, providing more information to those interested in serving on a committee.

According to a FINRA spokesman, prior to creating the portal, “interested prospective committee members reached out individually to a committee member they knew, or perhaps a committee liaison from FINRA. Obviously, some prospective members might not know anyone in those two categories. The portal gives all prospective committee members – including those who don’t ‘know someone,’ so to speak – a convenient way to express their interest.”

FINRA said the changes to the advisory committees builds on enhancements to FINRA’s committee structure announced in November.

The broker-dealer regulator announced last March that it was taking comments from BDs on how to enhance FINRA’s programs, including its committees, for engagement with its members and other stakeholders.

By creating the new Clearing Firm Advisory Committee and Capital Acquisition and Placement Broker Committee, FINRA said it hopes to “gain important feedback from these member-firm segments, including with respect to issues facing small firms whose customer accounts are carried at clearing firms and small firms engaged in capital-raising activities.”

The following changes were also made to these FINRA committees:

  • Membership Committee’s composition now includes medium-size firms, independent dealers and firms affiliated with insurance companies;

  • The Independent Dealer/Insurance Affiliate Committee and Regulatory Advisory Committee have been disbanded, as their respective purposes are being assumed by the Membership Committee;

  • The Compliance Advisory Committee and Small Firm Advisory Board are being renamed the Large Firm Advisory Committee and Small Firm Advisory Committee, respectively, to better reflect their respective purposes; and

  • FINRA is asking for Securities and Exchange Commission approval to reorganize its District Committees into Regional Committees that “mirror the regions in which FINRA’s 11 districts are administratively grouped.” The proposal also includes eligibility and voting standards designed to result in committees that better reflect the industry in each region.

A FINRA spokesman said that FINRA has not yet filed with the SEC the proposal to reorganize the district committees.

— Check out FINRA Files to Amend Arbitrator Hearing Procedures on ThinkAdvisor.


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