FINRA Board of Governors Meeting Report: Board Approves Two Rules

FINRA recently held a meeting of its Board of Governors on June 4-5. During the meeting, the Board made significant decisions, including approving two rule proposals, appointing new members to Advisory Committees, meeting with SEC Commissioner Mark Uyeda, and receiving updates on FINRA’s long-term financial planning and enterprise risk management and cybersecurity program.

One of the key outcomes of the meeting was the approval of two rule proposals. The first proposal involved amendments to FINRA Rule 4311, which focuses on carrying agreements. The proposed amendments aim to bring greater clarity to tri-party arrangements, the allocation of responsibilities under carrying agreements, the application of the rule to omnibus carrying arrangements, and streamline requirements related to the furnishing of reports by carrying firms to introducing firms.

The second rule proposal approved by the Board pertained to amendments to FINRA Rule 2210, which addresses communications with the public. These amendments seek to align the regulatory requirements for broker-dealers and investment advisers concerning performance projections in written communications to investors. The proposed amendments establish a narrowly tailored exception to the general prohibition on projections and allow for the presentation of projected performance and targeted returns under specific conditions.

In addition to the rule proposals, the Board appointed new members to FINRA’s various Advisory Committees, effective immediately. These committees play a crucial role in providing feedback on rule proposals, regulatory initiatives, and industry-related issues. The Board Chairman, Scott Curtis, emphasized the importance of participation and engagement in the Advisory Committees, stressing that the input received helps guide FINRA in its mission to protect investors and uphold market integrity.

Furthermore, discussions during the meeting centered around FINRA’s long-term financial planning. The Board approved FINRA’s 2024 Annual Financial Report, in accordance with its Financial Guiding Principles. This report is slated for publication later this month. The Board also received updates on various operational aspects, including FINRA’s enterprise risk management and cybersecurity program.

Looking ahead, the next FINRA Board meeting is scheduled for September. Those interested in more information about the Board’s operations, including membership and committee responsibilities, can find additional details on FINRA’s website.