The Government Accountability Office (GAO) has called on the Securities and Exchange Commission (SEC) to make oversight changes to the Financial Industry Regulatory Authority (FINRA)
According to an article in Yahoo Finance on July 13, the Government Accountability Office (GAO) has called on the Securities and Exchange Commission (SEC) to make oversight changes to the Financial Industry Regulatory Authority(FINRA), the agency that writes and enforces rules that regulate the ethics of brokerage firms and their representatives.
The GAO reportedly wants the SEC to develop FINRA and Securities Industry Oversight (FSIO) performance measures to protect investors and maintain efficient markets.
According to the GAO, the SEC reviewed FINRA at least 69 times and found that examinations and inspections lack “outcome-oriented data” and useful information for decision-making.
The GAO reportedly wants the SEC to make changes to better track deficiencies and corrective FINRA actions, as well as establish documented policies and procedures to share quality findings with internal stakeholders and FINRA.
According to the article, the SEC has generally agreed to three GAO recommendations, as follows:
- Develop FINRA performance measures that reflect leading practices and assure that the SEC is doing due diligence to protect investors and maintain efficient markets.
- Implement FSIO policies and procedures for tracking shortcomings associated with FINRA’s corrective actions.
- Implement FSIO procedures so that they can identify and communicate the importance of its inspections and examination findings.
FINRA, which oversees 617,548 representatives (as of 2020), mandates how investors and securities participants can behave and interact, and if its participants fail to follow its rules, may sanction them with suspensions or bar them from the securities industry. (To learn more about FINRA see FINRA BrokerCheck – Easy way to Check your Broker).
FINRA is also in charge of the qualifying exams for brokers and financial advisors in the securities industry. If any company or individual wants to sell securities in the U.S., they are required to register with FINRA and pass certain exams to get a license.
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Tags: FINRA attorney, FINRA lawyer, GAO and FINRA, SEC FINRA oversight changes, securities fraud attorneys Last modified: July 15, 2022