In a release, FINRA said CARDS involves account-reporting requirements that would allow it to collect account information on a standardized, automated, and regular basis, “as well as account activity and security identification information that a firm maintains as part of its books and records.”
The program will use automated data analytics to identify “problematic” sales practices, FINRA explained. It said it plans to analyze CARDS data before conducting an on-site examination, “thereby identifying risks earlier and shifting work away from the on-site exam process.”
In the release, FINRA noted that the Regulatory Notice does not include specific rule language, inasmuch as it hopes to receive comment on the appropriate design of CARDS and related costs.
“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 stated.
The comment period on the proposal expires Feb. 21.
To see Regulatory Notice 13-42, go to http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p413652.pdf.
Copyright 2013, The Bureau of National Affairs, Inc.
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