The Financial Industry Regulatory Authority Inc.’s (FINRA) issued guidance last week, laying out a framework for rulemaking meant to, “ensure that its rules are better designed to protect the investing public and maintain market integrity while minimizing unnecessary burdens.”
Rep. Darrell Issa (R-Calif.), whose committee has scrutinized regulation of the securities industry, hailed the action.
FINRA is an independent self-regulator that oversees more than 4,200 firms and more than 630,000 brokers. The preeminent government regulator of the industry is the Securities and Exchange Commission.
Regulators have increasingly come under pressure to incorporate cost-benefit analysis into their rules as a means to limit the strain of regulation on the private sector.
Proponents of stronger regulations argue that such analyses are often given undue weight in the development of rules needed to protect the public from unscrupulous business practices.