FINRA requests comment on fintech innovation in the broker-dealer industry

Luxembourg and Australia enter agreement on fintech and regtech

FINRA has issued a Special Notice seeking comment on how it can support financial technology (fintech) innovation consistent with its mission of investor protection and market integrity. The announcement builds on an initiative FINRA launched last year to improve communication with the securities industry around fintech. In addition, FINRA requests comment on certain fintech areas, including the provision of data aggregation services, supervisory processes concerning the use of artificial intelligence, and the development of a taxonomy-based machine-readable rulebook. The Notice requests comment by October 12, 2018.

Under FINRA360, FINRA has enhanced resources dedicated to this rapidly developing area of the industry, establishing an Innovation Outreach Initiative last year to foster an ongoing dialogue with the securities industry and to better understand fintech innovations and their impact on the industry. As part of this dialogue, a number of market participants expressed a desire for FINRA to solicit broader feedback regarding the effects of any FINRA rules or administrative programs on fintech innovation. The Special Notice is intended to provide an opportunity for such feedback.

The Innovation Outreach Initiative is led by FINRA’s Office of Emerging Regulatory Issues which, in collaboration with a cross-departmental team, developed the Notice after engaging with market participants through the initiative. The Notice summarizes steps already taken by FINRA through the initiative in support of fintech innovation and requests comments on potential additional measures.

The Innovation Outreach Initiative has helped us better understand fintech developments across the broker-dealer industry,” said FINRA President and CEO Robert Cook. “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. We also hope to learn about any potential areas of innovation that would benefit from a greater focus on investor protection safeguards.


Read Also: