FINRA Consolidation Results in Fewer Exams for Securities Firms

Thanks to the consolidation of NYSE and NASD into the Financial Industry Regulatory Authority (FINRA), security firms registered in the United States will now content with fewer regulatory tests. FINRA officials announced the decrease in the number of examinations.

Currently, a lot of firms are required to take a sales practice test and a financial examination with different regulators. Next year, however, the firms will be required to take just one examination that evaluates both finances and sales practices.

FINRA officials will oversee this new test. Brokers will also be given exams on price verification, valuations, proper disclosure procedures, and fees received.

FINRA officials also are in the process of creating streamlined standards that incorporates the best rules from the rulebooks of both NASD and NYSE. The FINRA rulebook will include revised and improved rules. New rules may be a combination of principle-based rules and prescriptive ones.

Also next year, FINRA will take a closer look at possible areas of conflict with hedge funds, money laundering, data security, fixed income reporting practices, supervisory controls, general suitability reviews, outsourcing practices, and subprime mortgage securitization-related matters.

The consolidation of NASD and NYSE into FINRA became final on July 27.

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Related Web Resources:

SIFMA’s Annual Meeting,, December 5, 2007