Earlier this year, FINRA announced a consultation on how it could improve capital formation.
FINRA is a key self-regulatory organization (SRO) that has oversight over the large broker-dealer industry. The agency has received some criticism in recent years for being too heavy-handed and opaque, with some advocating that FINRA be merged with the Securities and Exchange Commission.
FINRA notes that its members play a key role in access to capital for firms in need of growth funding. FINRA states that it supports the “capital-raising process through appropriately tailored rules for its members that are designed for the benefit of all market participants.”
FINRA has identified capital formation as an area of focus, with the initial feedback period ending on May 19, 2025, and subsequently extended to June 18, 2025. Today, FINRA is announcing that it remains interested in receiving feedback from industry participants.
One of the reasons this consultation is notable is that it affects securities crowdfunding platforms, some of which have been critical of FINRA in the past. Usually, this criticism is non-public.
David Burton, a Senior Fellow at the Heritage Foundation, wrote in 2017 that FINRA is largely unaccountable to the industry or the public.
One industry insider, David Duccini, founder and CEO of Silicon Prairie, has publicly shared his struggles with FINRA on LinkedIn.
As the Trump Administration has sought to enable innovation and access to capital, FINRA may be more receptive to outside feedback and take action to improve access to capital. It will be interesting to see if FINRA takes action on any feedback submitted by platforms or other insiders to better support capital formation.