Finra board approves changes to public communication rules

Broker-dealer regulator says parts of communications rules that would be excised include the filing of generic investment company material and shareholder reports.

Finra will streamline rules governing how brokers communicate with the public, the organization’s board decided Thursday.
The Financial Industry Regulatory Authority Inc., the industry-funded broker-dealer regulator, will release the proposal for public comment “in the coming months,” the organization said in a statement.
Finra did not give much detail on how the communications rule would be modified. Parts that would be excised include the filing of generic investment company material and shareholder reports. The goal is to “eliminate certain filing requirements that present a low level of risk to investors,” Finra said.
Finra also will propose changes to a rule on the use of investment analysis tools.
The revisions emanate from a review of existing rules that Finra launched in April 2014. The organization is trying to prune its voluminous rule book to “better align the economic benefits and the economic impacts,” Finra said.
The communication guidelines are the first to be put under the knife in the review initiative.
“The changes will make the communications rules more efficient and effective for firms of all sizes, including new members,” Finra chairman and chief executive Richard Ketchum said in a video following the board meeting.