Helping Small Firms is No Small Idea for FINRA

By Dowdy White, Spring 2018 IAC Student Intern

One of my favorite cartoon shows during my childhood was about a big cat that always chased after a tiny mouse in order to eat him. Each time the big cat gave chase to the small mouse, he found himself on the losing end of a violent trap or a forceful explosion. No matter what happened, the big cat always lost. As a result, the mouse was always safe. The elementary plot of the show continuously demonstrated that though one may be small, he would not always find himself on the losing end of a battle.

In the world of investing, small firms often find themselves in need of assistance when it comes to navigating FINRA’s legal policies, rules, and procedures. These firms, which contain less than 150 brokers apiece, have recently become a target area for FINRA’s new “FINRA360” initiative. According to FINRA CEO Robert Cook, this initiative was put in place in order to “ensure that FINRA is operating as the most effective self-regulatory organization (SRO) it can be, working to protect investors and promote market integrity in a manner that supports strong and vibrant capital markets.”

With that being said, FINRA announced on January 22, 2018, that the organization is launching a new “Small Firm Helpline” as the “latest in a series of actions to enhance support for small firms.” This new Helpline will provide assistance to general and routine questions from small firm brokers and additionally “complement the work of FINRA’s ‘Regulatory Coordinators,’” who assist firms seeking either “technical assistance or regulatory information.” This, FINRA states, will make it “faster and easier” for small firms to get assistance on matters such as financial questions and rule implementation.

Additionally, FINRA has taken a number of other actions to assist small firms. For example, FINRA developed a “Compliance Vendor Directory” to give small firms a database for searching for “third party vendors in support of a variety of [legal] compliance functions” and created a “Compliance Calendar” that gives small firms an accessible agenda of regulatory deadlines, and upcoming educational programs.

As I think about all of the legal news that comes from FINRA, I am quick to take notice of the organization’s work towards assisting small investment firms. Like the cartoon of the big cat chasing the small mouse, the little guys do not always lose. In the eyes of FINRA, one can easily see that they take a huge interest in smaller firms. In this case, the small firms can become mighty if they take advantage of FINRA’s new legal resources and investors can feel more comfortable with smaller firms handling their investments.

If you would like to learn more about how small firms receive help from FINRA or if you would like to learn more about FINRA’s new Small Firm Helpline, please visit:

  1. https://www.saveandinvest.org/military-credit-and-debt/dig-yourself-out-debt
  2. https://www.sec.gov/comments/sr-finra-2012-031/finra2012031-1.pdf
  3. https://www.finra.org/industry/certified-regulatory-and-compliance-professional-crcp-scholarship