A year on from predictions that Washington’s deregulatory mood would soften America’s markets regulator, FINRA’s own progress report suggests the forecast has landed.
According to AscentAI, the LeGaye Law Firm wrote in early 2025, “The Financial Industry Regulatory Authority (FINRA), while not a federal agency, operates under the supervision of the United States Securities and Exchange Commission (SEC).
AscentAI recently jumped into the recent FINRA Progress Report, and how it went from threatening ‘watchdog,’ to ‘howdy, neighbor?’.
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.”
That call now looks prescient. FINRA’s new disciplinary actions dropped 14.4% in 2025, and in April 2026 the regulator published “FINRA Forward: A Year of Progress”, setting out headway on empowering compliance support, modernising oversight and supporting resilience. Many of the changes reduce constraints on member firms, cut the risk of penalties and consolidate regulatory functions.
Highlights include giving firms greater say over replacement arbitrators, and filing proposed Rule 3290 with the SEC to merge Rules 3270 and 3280 into a single, narrower regime covering outside investment-related activities, with new carve-outs for affiliate work, personal property and non-securities investments.
Examination cycles for certain firms are shifting from four years to six, with advance notice of scheduled exams now standard and first-time exams streamlined to focus on higher-risk areas.
The Rapid Remediation Programme has also been expanded, favouring informal resolution over formal reviews, while manual exam workflows are being replaced by an automated, intelligence-led platform.
Core functions, Member Supervision, Market Regulation and Transparency Services, Enforcement, and Credentialing, Registration, Education and Disclosure, are being folded into two new teams: Regulatory Operations and Market & Regulatory Services.
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.’
More change is coming. Outside experts Professor Paul R. Eckert of William & Mary Law School and former SEC Commissioner Troy A. Paredes were brought in to review FINRA’s enforcement function, aiming at “protecting investors, safeguarding market integrity, and supporting vibrant capital markets in which everyone can participate with confidence.”
Their report, dated 30 June 2026, sets out 23 recommendations addressing due process, transparency, timelines and regulatory burden, including a formal five-year statute of limitations, more detailed Wells notices with a 30-day response window, and greater alternatives to formal enforcement.
FINRA President and CEO Robert Cook said, “We welcome these recommendations, which reflect a thoughtful evaluation of FINRA’s enforcement program informed by feedback from various stakeholders.”
Read the full AscentAI post here.
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