By John D'Antona

FINRA Launches Fintech Initiative

The Financial Industry Regulatory Authority (FINRA) announced it has established an Innovation Outreach Initiative to foster an ongoing dialogue with the securities industry that will help the regulator better understand financial technology innovations and their impact on the industry.

“FINRA has long been engaged in discussions about fintech issues with member firms and other key stakeholders. The Innovation Outreach Initiative will enable us to better track fintech developments across the rapidly changing industry environment in order to support innovation in the industry while maintaining investor protection and market integrity,” said Robert Cook, FINRA President and CEO.

Robert Cook, FINRA

The initiative will build on recent efforts by FINRA to focus on fintech, such as the launch of a new fintech webpage that highlights emerging fintech topics and FINRA materials, including pieces on blockchain technology and digital investment advice.

“Any support we can get from the regulators and help on the technology issue is welcome,” said one floor broker. “We applaud their efforts to help us.”

FINRA has also created a cross-departmental team led by its Office of Emerging Regulatory Issues that is responsible for carrying out the initiative and working closely with industry participants to gain real-time intelligence on fintech issues. The new team will take the lead on a number of program elements, including:

  • creating a Fintech Industry Committee to facilitate a continuous discussion on fintech developments and how FINRA’s rules and programs interact with technology innovations;
  • conducting regional roundtables to provide a forum for market participants (including FINRA members and non-members) to share thoughts, ideas and concerns regarding fintech topics;
  • developing timely publications on fintech topics, such as the increased adoption of regulatory technology applications and how this may impact the securities industry;
  • enhancing FINRA’s existing internal processes to effectively communicate with the industry, including training for staff responsible for coordinating with member firms on fintech issues; and
  • increasing collaboration with other regulators, both domestically and internationally.

The knowledge gathered through this initiative will help FINRA consider whether there are additional steps it should take to further facilitate fintech innovations in the securities industry.

As an initial step, FINRA will host a Blockchain Symposium in New York City on July 13, 2017. The half-day symposium will bring together regulators and industry leaders to discuss the use of blockchain – or distributed ledger technology (DLT) – and related opportunities and challenges.

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