I’d Like to Comment on That

By: Dowdy White, Spring 2018 Student Intern

One great thing about life is the fact that we have the power to speak up when we don’t like something. Though our comments or criticisms may sometimes be unsolicited or harsh, we still have the liberty to speak up and speak out.

Throughout its arbitration proceedings in accordance with rules of the Securities and Exchange Commission (SEC), FINRA has taken great concern with the circumstances in which a customer receives an arbitration award against a broker or firm that goes unpaid. FINRA has come up with many ideas and proposals to combat this issue, but the issue remains prevalent and on the forefront of FINRA’s mind. In fact, FINRA states that it is “continuing to pursue a number of proposals to further address this issue within the scope of its jurisdiction.”

Additionally, FINRA openly welcomes feedback from brokers, firms, and members of the public in order to enhance its programs and processes. In fact, FINRA released a Special Notice in March 2017 that introduced an initiative to evaluate FINRA’s operations and programs to identify opportunities to more effectively further its mission and assist investors and broker-dealers. Specifically, FINRA wants to engage with its member firms as well as investors in order to meet this initiative.

In the issue of unpaid arbitration awards, FINRA wants to engage in broader discussions with regulators, policymakers, firms, and investors about customer recovery. As a part of FINRA360, which is FINRA’s effort to ensure it is operating efficiently to protect investors and promote market integrity, FINRA seeks feedback on the issue of unpaid awards because the steps laid out by FINRA to combat the issue would require action by the SEC or Congress.

In addition, the problem of customers not being able to collect on an arbitration award or monetary judgment is not simply unique to the brokerage industry. FINRA believes that it would be beneficial to consider in “a more holistic manner” different dispute resolution systems and regulatory frameworks of the financial services industry. However, being able to fully address the issue requires feedback and comments from investors, brokers, and firms so that FINRA knows the problems being faced by its stakeholders and can plan to take action to alleviate such problems.

This is where you come in! You can be a voice that helps to change a FINRA policy or point out issues that FINRA needs to solve. You can start by submitting comments on proposed rule changes or you could comment on FINRA’s practices and processes in general. FINRA wants to engage in a more open dialogue, and you could be an integral part in making this happen. So, I encourage you to take the time to check out how you can help FINRA become better!