FINRA Seeks to Revolutionize Regulation with CARDS
FINRA Chairman and CEO Rick Ketchum wants to “revolutionize securities regulation” by implementing FINRA’s proposed Comprehensive Automated Risk Data System (CARDS). According to FINRA, through CARDS, FINRA will “collect, on a standardized, automated and regular basis, account information, as well as account activity and security identification information that a firm maintains as part of its books and records.” Mr. Ketchum says that FINRA wants to “collect and manage data from firms in such a way that we can quickly identify trends and product concentrations that are harmful to investors and take swift, responsive action.” Mr. Ketchum says that without CARDS, “the markets will continue to face a crisis of confidence.” Mr. Ketchum responded to the more than 800 comment letters raising concerns about operations, data protection and cost: “While I understand where many commenters’ concerns are coming from, they seem to me to be a tad one-sided.” He urged those in opposition to “view this initiative through the broader lens of investor protection, rather than through the more narrow lens of how it affects your firm.”
OUR TAKE: The implementation of CARDS, which appears to be a FINRA priority, would further drive the need to connect Compliance to IT. It will also require a tremendous expenditure of time and resources devoted to the significantly increased compliance, recordkeeping, and reporting requirements.