FINRA CEO Robert Cook testified before the House Financial Services Subcommittee on Capital Markets, Securities and Investment regarding (i) FINRA's agenda, structure and initiatives, (ii) the role that self-regulation plays in the U.S. capital markets, and (iii) FINRA's relationship with and oversight by the SEC (see prepared remarks and written testimony).
Mr. Cook highlighted the FINRA360 initiative, a program to review FINRA's organizational performance (see previous coverage), as an example of FINRA's commitment to comprehensive evolution and improvement. Mr. Cook stated that FINRA360 spurred several actions intended to improve FINRA's performance, including consolidating the organization's enforcement functions (see previous coverage). Mr. Cook identified several other actions taken by FINRA in order to "meet the needs of investors," including:
- expanded reporting of U.S. Treasury securities transactions;
- establishing the Securities Helpline for Seniors;
- using cloud technology to conduct market surveillance; and
- launching the Innovation Outreach Initiative, a FinTech-focused initiative designed to facilitate engagement with market participants concerning technological developments in the financial markets.
Mr. Cook asserted that FINRA continues to improve its examination processes, as well as the compliance resources that are available to industry members. In addition, he said that FINRA is dedicated to stopping "bad actors," and pointed to several actions taken to accomplish this goal (e.g., proposals for the oversight of "high-risk" brokers).
Mr. Cook specified several areas on which FINRA will focus for the remainder of the year, including potentially abusive trading algorithms, cross-market and cross-product manipulation, order routing practices, best execution and disclosure, and market access controls. He also specified several other rulemaking and procedural efforts that FINRA is undertaking pursuant to a retrospective rule review under FINRA360.
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