The easiest way for financial advisors to have an impact on the regulatory reform process is to participate in it. That was the advice from FINRA VP and associate general counsel Jim Wrona at the Financial Services Institute’s Financial Advisor Summit in Washington, D.C. During a breakout session Tuesday at the event, Wrona urged advisors to join one of FINRA’s 15 committees. At the very least, Wrona said advisors should craft comment letters — no matter how short — when they are concerned about proposed regulatory actions. What kind of input is most helpful according to Wrona? Rather than just highlight problems with a proposed rule, comment letters should offer an alternative that satisfies the same goal.
“We read every single comment letter. We have teams of attorneys who sit and analyze every comment,” Wrona said. “And we respond to the material issues that are raised.” Wrona cited the suitability rule as an example of when letters submitted by independent advisors were crucial in the final shaping of the rule.
Wrona, who was joined by FSI general counsel David Bellaire, shared details on the regulatory reform process and how FINRA goes about shaping its rules. Wrona said FINRA often looks inward when it comes to improving the regulatory process. “FINRA has to do a better job of crafting the rules and in some cases explaining the rules,” Wrona said, adding that FINRA often takes a retroactive look at major rules to evaluate how they are performing.