Regulatory Practice Letter #14-06 | February 18, 2014

Regulatory Practice Letter #14-06 | February 18, ...

FINRA Requests Comment on a Concept Proposal to Develop the Comprehensive Automated Risk Data System

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Executive Summary

The Financial Industry Regulatory Authority (FINRA) has issued a Regulatory Notice soliciting comment on a “concept proposal” to develop a new, rule-based program called the Comprehensive Automated Risk Data System (CARDS). FINRA states that CARDS would involve account reporting requirements that would allow it to collect account information on a standardized, automated, and regular basis. CARDS would also allow FINRA to collect account activity and security identification information that its member firms maintain as part of their books and records. FINRA also states that it would analyze CARDS data before examining firms on site, thereby identifying risks earlier and shifting work away from the on-site exam process.

The Regulatory Notice is intended to obtain the views of firms and others at the initial stage of determining how FINRA should obtain broader information to advance its supervision of firms and their associated persons.

Comments on the proposal were originally requested through February 21, 2014, but have been extended to March 21, 2014.

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