THE Financial Industry Regulatory Authority is soliciting feedback from the investment industry about its proposed Comprehensive Automated Risk Data System (CARDS) rule.
The authority intends introducing the rule on a phased basis and anticipates that CARDS can improve investor protection whilst maintaining market integrity for those high risk products not currently examined through FINRA or SEC surveillance programs.
FINRA expects CARDS will assist the authority to identify high-risk areas and suspicious activities and then respond quickly to any rule breach.
Phase one would see clearing and carrying firms having to submit information relating to their securities accounts and also for those securities accounts which they clear. There are around 200 such firms.
Phase Two would require fully-disclosed introducing firms to submit specified account profile-related data to FINRA or through an approved third party firm. Personal data would not be collected any any stage of the process.
Richard Ketchum, FINRA Chairman and CEO said: "It is critical that we work together to strengthen investor confidence, and the ultimate purpose of the data and analytic capabilities to be obtained through CARDS is to help protect investors' bottom line. Without collecting one iota of personally identifiable information, CARDS will help us quickly identify unusual trends and product concentrations—and take swift, responsive action."
Source: FINRA Newsroom