Retrospective Rule Review
Updated as of June 5, 2023
FINRA believes that it is appropriate, after a reasonable period of time, to look back at its significant rulemakings to determine whether a FINRA rule or rule set is meeting its intended investor protection objectives by reasonably efficient means, particularly in light of environmental, industry and market changes. These retrospective reviews look at the substance and application of a rule or rule set, including any gaps or unintended consequences, as well as FINRA's processes to administer the rules.
“There’s a discipline to asking certain kinds of questions when you are going to do a regulatory intervention…Getting in the practice of asking those questions makes us a better regulator.”
— Jonathan Sokobin, FINRA Chief Economist
The review process typically consists of an assessment phase and an action phase. During the assessment phase, FINRA will review the efficacy and efficiency of the rule or rule set as currently implemented, including FINRA's internal administrative processes. To that end, FINRA will seek input from affected parties and experts, including its advisory committees, subject-matter experts inside and outside of the organization, and other interested parties, including industry members, investors, trade groups and the public.
The subsequent action phase effectuates any recommendations arising from the assessment, which could include, among others, changes to the rule or its administration, guidance or systems upgrades. However, not every assessment will result in rule changes; the assessment may conclude that the rule remains relevant and appropriately tailored to meet its objectives. FINRA will separately engage in its usual rulemaking process to propose amendments to the rules, which process will include input from FINRA's advisory committees and an opportunity for comment on specific proposed revisions in a Regulatory Notice or rule filing with the SEC, or both.
Below is information on the rules FINRA has or is reviewing as part of our retrospective review program.
| Description | Status | Links | Related Rulemaking or Guidance |
|---|---|---|---|
| Diversity and Inclusion | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 21-17 | |
| Pandemic Review | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 20-42 (review seeking lessons learned from COVID-19) | Regulatory Notice 21-44 SR-FINRA-2022-021 See also Regulatory Notice 20-08 Regulatory Notice 20-16 |
Reporting Requirements FINRA Rule 4530 | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 20-02 (retro review) | |
Senior Investors/Exploitation; FINRA Rule 2165 | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 19-27 (retro review) | Regulatory Notice 20-34 SR-FINRA-2021-016 Regulatory Notice 21-43 Regulatory Notice 22-05 |
Business Continuity Planning FINRA Rule 4370 | Assessment Phase Complete Action Phase Complete | Regulatory Notice 19-06 Regulatory Notice 21-44 | See also Regulatory Notice 20- 08 (pandemic-related BCP guidance and regulatory relief) |
Annual Compliance Meeting FINRA Rule 3110(a)(7) and SM .04 | Assessment Phase Complete Action Phase Complete | Regulatory Notice 18-14 Regulatory Notice 19-34 | |
Carrying Agreements FINRA Rule 4311 | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 18-10 (retro review) | |
Payments for Market Making FINRA Rule 5250 | Assessment Phase Complete Action Phase Complete | Regulatory Notice 17-41 Regulatory Notice 20-03 | |
Outside Business Activities FINRA Rule 3270 Private Securities Transactions FINRA Rule 3280 | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 17-20 (retro review) | Regulatory Notice 18-08 (follow on proposal to replace Rules 3270 and 3280) |
Capital Raising FINRA Rule 5110 | Assessment Phase Complete Action Phase Complete | Regulatory Notice 17-14 Regulatory Notice 23-09 | Regulatory Notice 17-15 SR-FINRA-2019-012 Regulatory Notice 20-10 SR-FINRA-2019-022 |
MAP FINRA Rule 1000 Series | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 18-23 (follow on proposal to amend the MAP rules) | |
Gifts and Non-Cash FINRA Rule 3220 | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 14-15 | Regulatory Notice 16-29 (follow on proposal to amend Rule 3220 and adopt new Rules 3221 and 3222) |
Communications with the Public FINRA Rule 2210 | Assessment Phase Complete Action Phase Ongoing | Regulatory Notice 14-14 | Regulatory Notice 15-17 SR-FINRA-2016-018 Regulatory Notice 17-06 Regulatory Notice 17-18 |
Please direct any questions regarding the retrospective review program to the Office of the Chief Economist or the Office of the General Counsel.