FINRA reported the total amount that it issued in fines as well as the amount in fines-eligible expenditures in 2018.
In 2018, FINRA issued $61.0 million in fines and $81.1 million in fines-eligible expenditures, resulting in a negative $20.1 million balance, which FINRA stated was funded from its reserves. FINRA designated fines-eligible expenditures with the intention of (i) protecting investors and the markets and (ii) accommodating the changing brokerage industry. In support of these goals, the expenditures primarily supported FINRA's capital and education initiatives.
As part of its capital initiative and strategic expenditures initiative, FINRA dedicated its fines-eligible expenditures in 2018 to implementing programs that:
- modernized the securities industry through administering technological systems that support the regulation of brokers and their firms;
- strengthened regulators' ability to conduct cross-market surveillance for almost all trading of U.S.-listed equities markets by building a comprehensive regulatory audit trail;
- updated FINRA regulatory operations with thorough examinations and investigations so as to improve business practices and understand risk; and
- facilitated member firms' regulatory compliance by updating FINRA filing systems.
As part of its education, compliance resources and training initiative, FINRA dedicated its fines-eligible expenditures in 2018 to implementing programs that:
- educated investors with unbiased information to make well-informed decisions about their assets;
- provided tools and resources for broker-dealers, individual brokers and the investing public, such as call center support and enhancing the Compliance Vendor Directory for firms; and
- trained FINRA staff on new regulatory challenges.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.