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Regulation and Compliance > Federal Regulation > FINRA

FINRA Seeks BD Feedback on How Regs Affect Fintech

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The Financial Industry Regulatory Authority wants broker-dealers to weigh in on how the self-regulator can foster innovation in the fintech space while ensuring investor protection and market integrity, and how current FINRA rules may be getting in the way of such innovation.

FINRA issued a Special Notice Monday seeking BD comment on fintech areas such as data aggregation services, supervisory processes around the use of artificial intelligence, and the development of a taxonomy-based machine-readable rulebook.

Comments are due by Oct.12.

(Related: Has the Robo-Advisor Frenzy Peaked?)

The request for comment builds on the Innovation Outreach Initiative that FINRA launched last June to foster an ongoing dialogue with the securities industry as well as to better understand how advances in financial technology affect the brokerage industry.

As part of this dialogue, a number of market participants asked FINRA “to solicit broader feedback regarding the effects of any FINRA rules or administrative programs on fintech innovation,” the self-regulator said.

“The Innovation Outreach Initiative has helped us better understand fintech developments across the broker-dealer industry,” said Robert Cook, FINRA’s president and CEO, in announcing the notice for comment.

“As we consider taking additional steps, it is important to broaden the dialogue to hear how any FINRA rules or administrative processes could be modified to better support fintech innovation without adversely affecting investor protection or market integrity,” Cook said, adding that FINRA also hopes “to learn about any potential areas of innovation that would benefit from a greater focus on investor protection safeguards.”


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