The Financial Industry Regulatory Authority (FINRA) has initiated a comprehensive review of its regulatory framework, aiming to modernize rules to better align with the evolving dynamics of the financial industry. This initiative underscores FINRA’s commitment to maintaining effective and efficient regulations that protect investors and ensure market integrity. Central to this process is the solicitation of feedback from industry participants, emphasizing the importance of collaborative engagement in shaping the regulatory landscape.

Scope of the Review

FINRA’s retrospective rule review process involves assessing the substance and application of existing rules to identify any gaps or unintended consequences. This approach ensures that regulations remain relevant and appropriately designed to achieve their objectives, particularly considering environmental, industry, and market changes.

The current review will initially focus on two key areas:

1. Capital Formation: Evaluating rules that impact the ability of firms to raise capital, with the goal of identifying and eliminating unnecessary barriers that may hinder efficient capital formation.
2. The Modern Workplace: Addressing regulatory considerations related to contemporary work environments, including remote supervision and recordkeeping practices, to ensure that rules accommodate the realities of modern work arrangements.

Invitation for Industry Feedback

FINRA recognizes that industry input is vital to the success of this review. Engaging with member firms, associated persons, investors, and other stakeholders provides valuable insights that can inform potential rule amendments and ensure that regulations are practical and effective. To facilitate this engagement, FINRA has issued Regulatory Notice 25-04, inviting comments on any aspects of its rules, operations, and administrative processes.

How to Submit Feedback

Firms and individuals are encouraged to participate in this important initiative by submitting their comments and suggestions. Feedback can be provided through various methods outlined in FINRA’s Requests for Comments page. The comment period for this review is open until May 12, 2025.

Benefits of Participation

Active participation in this review process offers several benefits to firms and industry professionals:

• Influence Regulatory Developments: By providing feedback, firms can shape regulations in a manner that reflects practical considerations and promotes a fair and efficient marketplace.
• Enhance Compliance Practices: Engaging in the review allows firms to gain a deeper understanding of regulatory expectations, facilitating the development of robust compliance programs.
• Foster a Collaborative Regulatory Environment: Contributing to the dialogue between regulators and industry participants fosters mutual understanding and cooperation, leading to more effective regulatory outcomes.

Conclusion

FINRA’s broad review of its rules represents a significant effort to modernize the regulatory framework governing the financial industry. By seeking and incorporating feedback from industry participants, FINRA aims to ensure that its regulations continue to protect investors and maintain market integrity, while adapting to the evolving landscape of the financial sector. Firms are strongly encouraged to engage in this process by submitting their insights and suggestions before the May 12, 2025, deadline.