Wednesday, May 7, 2014

FINRA Solicits Comment on Comprehensive Automated Risk Data System (CARDS) Proposal

WASHINGTON—The Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice soliciting comment regarding an innovative proposal called Comprehensive Automated Risk Data System (CARDS). CARDS will involve account reporting requirements that would allow FINRA to collect, on a standardized, automated and regular basis, account information, as well as account activity and security identification information that a firm maintains as part of its books and records.

In its first phase, the CARDS program will increase FINRA's ability to protect the investing public by utilizing automated analytics on brokerage data to identify problematic sales practice activity. FINRA plans to analyze CARDS data before examining firms on site, thereby identifying risks earlier and shifting work away from the on-site exam process.

"The information collected through CARDS will allow FINRA to run analytics that identify potential "red flags" of sales practice misconduct and help us identify potential business conduct problems with firms, branches and registered representatives," said Susan Axelrod, FINRA's Executive Vice President of Regulatory Operations.

FINRA's Regulatory Notice discusses the CARDS concept without specific rule language, to solicit comments on the appropriate design of CARDS and related costs. The core principles in FINRA's recently released Framework Regarding FINRA's Approach to Economic Impact Assessment for Proposed Rulemaking will guide the CARDS rulemaking process and help reduce unnecessary burdens to the industry.

"FINRA's new Framework will result in a more transparent and rigorous rulemaking process. FINRA will consult with key stakeholders and provide clarity about the objectives and potential impacts of the proposal," said FINRA's Chief Economist Jonathan Sokobin.

As currently envisioned, once CARDS is implemented, clearing firms (on behalf of introducing firms) and self-clearing firms would submit in an automated, standardized format, and on a regular basis, specific information relating to their customers' accounts and the customer accounts of each member firm for which they clear. 

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business—from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. For more information, please visit

In the midst of the financial crisis, our “leaders” had a choice. They could’ve done what most Americans wanted, which was allow failing firms to fail and permit the chips to fall where they may. In contrast, our “leaders” settled on trillion dollar bailouts with zero strings attached for the criminals who destroyed the nation’s economy. At that point, the American people would’ve been at least somewhat satisfied if the rule of law was applied to the banksters, and those who deserved to go to jail were locked up. As we all know by now, the Justice Department decided to create a special “Too Big To Jail” untouchable class, and nobody was held accountable for anything. Once again, our “leadership” could've look at the situation honestly and responded appropriately. Rather, they doubled down on corruption and criminality and now nobody trusts anything. We don’t trust the Presidency, the Congress, the intelligence agencies, the banks, the financial system, the courts, the Federal Reserve, or any institutions at all. We certainly don’t trust Democrats and Republicans. In fact, millennials in particular have given up all trust in everything. They don’t even trust Jay-z anymore, which I suppose is what happens when you prance around with Warren Buffett and flash illuminati signs 24/7. This is how society breaks down.
Moving along, with confidence in “the system” already in the gutter by summer 2013, Edward Snowden released a bombshell of information on illegal government spying. It confirmed what so many of us had been saying for years, but had been dismissed pejoratively by the mainstream as “conspiracy theorists.” Once again, our “leaders” had a choice. Take the difficult steps and offer real reform, or merely pretend nothing really happened and defend the practices at all costs. Once again, they chose the latter. Just as no bankers were jailed for the financial crisis, no intelligence operatives were jailed for illegal spying. In fact, nothing at all has happened to James Clapper for perjuring himself in front of Congress.