FINRA Wants to Better Understand Fintech. Launches “Innovation Outreach Initiative”


The Financial Industry Regulatory Authority (FINRA) has created a new entity to help it better understand Fintech innovation. Announced today, FINRA has created “Innovation Outreach Initiative” to “foster an ongoing dialogue” with the securities as finance goes digital. FINRA says the initiative will build on recent efforts within the regulator 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. The knowledge gathered through this new initiative will assist FINRA in considering whether there are additional steps it should take to further facilitate Fintech innovations in the securities industry – or perhaps regulate it further.

Robert Cook, FINRA President and CEO, said that FINRA has long been engaged in discussions on Fintech with key industry 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 Cook.

FINRA has also created a cross-departmental team led by its Office of Emerging Regulatory Issues that is responsible for the initiative. FINRA says it is working closely with industry participants to gain real-time intelligence on Fintech issues.

The new team will take the lead on a number of 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.

Cook is relatively new in his position and he has taken a more holistic approach in managing the securities industry and the brokers that do business in the US. His outreach efforts have not gone unnoticed within the securities industry. In years past, FINRA has earned a reputation fore being averse to change and quick to punish firms for infringements that, at times, appear to be quite minor. Crowdfund Insider has spoken to participants within the alternative finance industry that believe FINRA “does not get it,” when discussing Fintech. Perhaps this newest initiative will lead a wave of change.

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