FINRA Board of Governors Approves Five Rule Proposals Under Rule Modernization Initiative
"By shortening exam waiting periods, embracing electronic delivery of regulatory requests, streamlining operational requirements and updating alternative investment reconciliation requirements, we are reducing unnecessary burdens on member firms and supporting more efficient market operations."
Scott Curtis, Chair of the FINRA Board of Governors
"By shortening exam waiting periods, embracing electronic delivery of regulatory requests, streamlining operational requirements and updating alternative investment reconciliation requirements, we are reducing unnecessary burdens on member firms and supporting more efficient market operations."
Scott Curtis, Chair of the FINRA Board of Governors
At its first meeting in 2026, FINRA's Board of Governors approved five rule proposals as part of the "FINRA Forward" rule modernization initiative to update and enhance FINRA rules and guidance.
The proposals address various operational, compliance, and arbitration processes:
- Shortened Exam Waiting Periods. The proposal shortens the waiting periods required for individuals to retake FINRA qualification exams.
- Electronic Delivery of Regulatory Requests. The proposal allows FINRA to electronically deliver "requests for information and testimony to member firms" through its FINRA Gateway compliance platform.
- Streamlined Allocation Approval Requirements. The proposal eliminates the requirement that "late allocations of bulk investment adviser orders be approved by a firm principal," recognizing the "limited utility and operational challenges of obtaining principal approval" in a highly automated environment.
- Alternative Investment Reconciliation. The proposal adjusts reconciliation requirements for certain alternative investments to conform with recent SEC no-action relief and expands upon FINRA's recently published guidance on the matter.
- Arbitration Procedure Enhancements. The proposal amends "FINRA's Codes of Arbitration Procedure to provide parties with greater input into replacing arbitrators" and "codif[ies] the current practice of compensating replacement arbitrators for time spent reviewing recordings and transcripts."
The Board also received a briefing on enhancements to FINRA's enforcement program. Additionally, the Board approved the allocation of 2025 fine monies to various initiatives in accordance with FINRA's Financial Guiding Principles, with further details to be released in a forthcoming "Report on the Use of 2025 Fine Monies."