In early 2025, the LeGaye Law Firm wrote, “The Financial Industry Regulatory Authority (FINRA), while not a federal agency, operates under the supervision of the United States Securities and Exchange Commission (SEC). As the SEC aligns more closely with White House deregulation directives, FINRA may experience indirect effects on its rule-making process. The SEC’s enhanced oversight could lead to a more streamlined regulatory environment, potentially influencing FINRA to adjust its policies accordingly.”1
In mid-2026, it’s now safe to call that insight prescient. In 2025, FINRA’s new disciplinary actions fell 14.4%, signaling the deregulatory bent. In April of 2026, FINRA published “FINRA Forward: A Year of Progress,” highlighting its progress on its goals of “empowering compliance support,” “modernizing oversight,” and “supporting resilience.” In keeping with the current administration’s deregulatory and business-friendly leanings, the report laud actions, many of which remove constraints on member organization behavior, reduce the risk of penalties, and consolidate functions in ways that limit member organizations’ regulatory exposure.
FINRA’s Forward’s highlighted changes include:
- Providing parties with greater input into selecting replacement arbitrators.
- Filing proposed new FINRA Rule 3290 with the SEC to replace FINRA Rules 3270 (outside business activities) and 3280 (private securities transactions) with a single, streamlined rule that narrows coverage to outside investment-related activities that pose greater risk while providing new exclusions for activities at affiliates, personal real estate, and personal investments in non-securities. This change lessens the risks of conflict of interest.
- Shifting certain firms from a four-year to a six-year examination cycle and streamlining first firm exams for certain firms in order to focus on riskier areas. FINRA also began providing advance notice of scheduled cycle exams. Clearly, fewer examinations and limiting those to areas perceived as high risk lessens the regulatory burden on impacted firms.
- Expanding the Rapid Remediation Program to help firms address potentially systemic issues sooner through informal resolution rather than formal regulatory reviews. This represents the far more neighborly than adversarial approach to regulatory compliance.
- Streamlining first firm exams for certain firms by tailoring the initial scope based on risk, allowing examination resources to focus on higher-risk areas, and providing firms with advance notice of the estimated quarter for exams, with plans to provide even earlier notice for 2027 exams.
- Replacing manual examination processes and workflows with an automated platform that leverages internal intelligence to better tailor exams to risk while mitigating manual work and duplicative or broad information requests.
- Reorganizing core regulatory functions—Member Supervision, Market Regulation and Transparency Services (MRTS), Enforcement, and Credentialing, Registration, Education and Disclosure (CRED)—into two new teams: Regulatory Operations and Market & Regulatory Services. This tighter integration is said to support stronger coordination, deeper intelligence sharing, and more streamlined technology and processes so that FINRA can better deploy resources against a complex and rapidly evolving array of risks to investors and markets.
More loosening to come
“In an introduction to the report, FINRA Chief Executive Robert Cook wrote that what distinguishes the self-regulator is its focus on the ‘right outcome’ rather than ‘case numbers, fine amounts.’”2
Last year, as part of the FINRA Forward initiative, FINRA engaged two outside experts with industry ties, Professor Paul R. Eckert of William & Mary Law School and former SEC Commissioner Troy A. Paredes of Paredes Strategies, to review policies and find opportunities to improve FINRA’s enforcement function with the goals of “protecting investors, safeguarding market integrity, and supporting vibrant capital markets in which everyone can participate with confidence.”
The report, dated June 30, 2026, provides 23 recommendations that address industry complaints about due process, transparency, timelines, and regulatory burden. FINRA President and CEO, Robert Cook, wrote: “We welcome these recommendations, which reflect a thoughtful evaluation of FINRA’s enforcement program informed by feedback from various stakeholders.”
Among the report’s recommendations:
- Urging FINRA to adopt a formal statute of limitations of five years after most alleged violations.
- The reviewers also sought to give firms more opportunity to push back during the enforcement process
- More detailed Wells notices that explain regulatory reasoning and provide “reasonable opportunity,” including a 30-day window to respond.
- More alternatives to formal enforcement.
FINRA-ordered rebates to customers fell 28.8% year-over-year
FINRA expelled four firms in 2024, and one in 2025
The number of registrants suspended by FINRA dropped by 33.6%
The direction is clear. FINRA is pursuing a far more collegial stance toward the institutions it oversees. While consumer watchdogs may disapprove, the industry will welcome the change—at least until the winds shift during a subsequent administration.
1 https://www.legayelaw.com/deregulation-oversight-and-finra-a-new-regulatory-era/
2 https://www.advisorhub.com/outside-review-recommends-broad-overhaul-of-finra-enforcement/
