Regulatory Insight -- US Securities & Banking
Principles-based FINRA Rulebook
The securities industry is eagerly awaiting a new FINRA rulebook that will contain a uniform set of rules for FINRA-only and dual FINRA-NYSE member firms. According to public statements of its senior executives, FINRA plans not only to eliminate inconsistent, duplicative and obsolete rules, but also to reorganize the rulebook and to infuse it with a much greater emphasis on principles-based regulation. This development is expected to promote flexibility and effectiveness in regulation. However, the rulebook is only one element of the overall regulatory regime, and changes in the philosophy and approach of FINRA's rules will have important consequences for other components of FINRA's regulatory program, including examinations, rule interpretations and enforcement.