FINRA launches high-tech rulebook

In an effort to streamline compliance, the U.S. self-regulatory organization the Financial Industry Regulatory Authority Inc. (FINRA) is launching a machine-readable rulebook.

The SRO said the initiative is intended to enhance firms’ compliance efforts, reduce costs and help risk management.

The rulebook uses an embedded taxonomy, which classifies and tags key terms and concepts in FINRA’s most used rules, enabling enhanced search capabilities.

“This enhanced search feature is designed to help users, including market participants and members of the public alike, to efficiently identify potentially relevant FINRA rules and their associated requirements,” the SRO said in a release.

The SRO is also offering access to the rulebook through a software interface that can enable firms to automate certain compliance functions.

“The securities industry is increasingly relying on technology to improve both internal operational functions as well as regulatory compliance,” said Haimera Workie, vice-president and head of FINRA’s Office of Financial Innovation, in a release. “FINRA’s machine-readable rulebook initiative is designed to support these efforts by providing technology-based tools, allowing market participants to potentially enhance the effectiveness and efficiency of their compliance efforts and thereby support investor protection and market integrity.”

In a special notice, FINRA said it’s seeking comment on the machine-readable rulebook, including the available content, the search features, and any benefits or challenges for users. The deadline for feedback is Dec. 20.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.