FINRA Is Apparently Holding Its CARDS

Broker-dealers appear to have succeeded, at least for now, in beating back FINRA's proposal to capture extensive amounts of data through electronic means.

For over a year, FINRA has been pushing its Comprehensive Automated Risk Data System (CARDS), which would require clearing firms (on behalf of introducing firms) and self-clearing firms to regularly submit to FINRA, in an automated, standardized format, specific information about their customers' accounts and the customer accounts of each member firm for which they clear.   FINRA claims that CARDS would enhance FINRA's access to data and analytics, "help it evolve [its] risk-based surveillance and examination programs regarding sales activities" and enable it to "operate as an early warning system to more effectively identify potential fraudulent activity and customer sales practice abuse to guide examinations," according to testimony last week by Richard Ketchum, FINRA Chairman and CEO, before the House