FINRA to overhaul its registration, disclosure programs

The Financial Industry Regulatory Authority (FINRA) announced last week an initiative to overhaul its registration and disclosure programs, including the Central Registration Depository (CRD), which is the central licensing and registration system that FINRA operates for the U.S. securities industry.

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The overhaul seeks to bolster the efficiency of the registration and disclosure process for firms, investors, and regulators. Further, it is designed to reduce compliance costs for firms.

“This important initiative will strengthen an essential function of the securities industry,” FINRA President and CEO Robert Cook said. “The transformation will allow FINRA to develop systems that help firms effectively maintain compliance programs and reduce compliance costs while continuing to operate and enhance BrokerCheck as an essential tool for investors.”

Securities firms use BrokerCheck to research the professional backgrounds of brokers and brokerage firms.

The first phase of the project features a new WebCRD interface that highlights important information or activities requiring the immediate attention of firms, branches, and individuals. This goes into effect June 30.

“The CRD is an important tool for the financial services industry, regulators, and investors. We applaud FINRA for undertaking this initiative to upgrade the system’s operations,” said Joseph Borg, president of the North American Securities Administrators Association (NASAA) and director of the Alabama Securities Commission.

The changes are being made in response to FINRA’s organizational improvement initiative—FINRA360. FINRA expects to complete the project in 2021.