FINRA board advances four SEC rule filings as modernization effort continues

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FINRA advances SEC rule filings

Highlights

FINRA Board of Governors approved four rule proposals for SEC filing at its Sept. 29-30 meeting, advancing regulatory modernization efforts.
Proposals include targeting membership application reviews on risk, adding flexibility to CEO certification deadlines, and removing outdated or duplicative requirements.
Rule changes aim to reduce administrative burden on lower-risk firms while aligning FINRA rulebook with SEC Regulation Best Interest and removing the Same Quote Rule.

Rule proposals head to the SEC

As reported by FINRA, the FINRA Board of Governors approves four rule proposals for filing with the SEC at its Sept. 29-30 meeting and also receives briefings on broader initiatives, including ongoing rule modernization work.

The organization says the proposals reflect feedback gathered through FINRA Forward, its continuing effort to improve effectiveness and efficiency in carrying out its mission. FINRA Board Chair Scott Curtis says the measures are intended to refresh the regulatory framework for member firms, markets and investors, while focusing membership reviews more closely on risk, adding flexibility to certification deadlines and removing outdated requirements.

The four proposals cover membership application review, annual CEO compliance and supervisory process certification deadlines, the rescission of the Same Quote Rule for over-the-counter equity securities quoted across multiple platforms, and the repeal of a mutual fund prospectus cash compensation disclosure requirement that FINRA says overlaps with the SEC's Regulation Best Interest and other disclosure rules.

Compliance and market impact for member firms

The membership application review proposal is designed to better target regulatory attention on risk in both new and continuing membership applications. That shift may reduce administrative burdens in lower-risk cases while preserving scrutiny where FINRA sees greater potential harm to investors or markets.

Greater flexibility on CEO certification deadlines could give firms more room in managing annual compliance and supervisory processes, particularly when internal review timelines vary. The proposed removal of the Same Quote Rule and the mutual fund cash compensation disclosure requirement also points to FINRA's effort to eliminate legacy or duplicative obligations as it updates its rulebook alongside existing SEC standards.

Our earlier article on Schedule 13D/13G disclosure rules examined how a broadening debate over U.S. securities law could affect ordinary shareholder engagement with corporate management. We noted that if regulators or courts interpret “influencing control” more narrowly, mainstream asset managers—including mutual funds involved in ESG-related stewardship—could face higher compliance risk and greater legal sensitivity around routine governance discussions.

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