FINRA’s new CEO, Robert Cook, spent his first 100 days listening to its members and industry stakeholders, but that listening tour is not over. The self-regulatory organization has had a reputation for being “tin-eared,” Cook said, during the opening session at the Financial Services Institute’s annual OneVoice conference in San Francisco on Monday.
“That’s something I hope to change.”
Cook indicated there are already efforts underway to listen to FINRA’s members. The regulator learns a lot through the examination process, so some members have suggested FINRA share what it learns so they can get ahead of issues. Indeed, Cook said FINRA is going to start sharing what it sees during exams, so firms can react.
Small firms have suggested the regulator find ways to assist them in complying with the rules. So FINRA has decided to conduct a survey of smaller firms to identify which resources are helpful to them.
To start, FINRA has introduced a compliance calendar, as well as a new compliance vendor directory.
Cooks also aims to listen more to members on how FINRA is organized, and he believes it’s time to take a fresh look at various areas of its operations. For example, within its enforcement programs, there are two distinct sides: the market side and the member regulatory side. He has heard from member firms that dealing with each side is like dealing with two different regulators. Should they be consolidated into one enforcement program? “That’s worth taking a look at,” he said.
FINRA is also going to take a fresh look at engagement and transparency with members and stakeholders, Cook said.
Commenting on the Department of Labor’s fiduciary rule, Cook said that depending on which way it goes, it could create some tag-along implications for FINRA’s rules; rulemaking that could either support what the DOL is doing or where its rules could be redundant. FINRA wants to be constructive and make sure there isn’t an additional layer of regulation without thinking about the existing rules, Cook said.
He doesn’t want to exacerbate unnecessary regulatory arbitrage—welcoming words to a room full of b/d executives. His goal for the next five years is for FINRA to live up to the potential of its model and the promise of how the SRO can be different from government. He wants people to be confident in FINRA and members to feel proud when they put it on their door.
“[Still,] we have a long way to go,” he said.
