Free FINRA Cybersecurity Compliance Program for Small Firms

FINRA, also known on the streets of Wall Street as the Financial Industry Regulatory Authority, is offering a free Cybersecurity Compliance Program for small firms. Here is the template.  

But first, let’s explore what FINRA is, why it’s essential, and why your financial services firm might be a good candidate for FINRA’s new free Cybersecurity Compliance Program. Let’s begin with the basics.

What is FINRA? 

FINRA is a government-authorized not-for-profit organization that oversees U.S. broker-dealers to protect investors and ensure the market’s integrity. They work to ensure that everyone can participate in the market with confidence. 

Who and what does FINRA regulate?

FINRA regulates broker-dealers, capital acquisition brokers, and funding portals. 

  • A Broker-Dealer is in the business of buying or selling securities on behalf of its customers or its account, or both. 
  • A Capital Acquisition Broker is a Broker-Dealer that is subject to a narrow rule book. 
  • A Funding Portal is a crowdfunding intermediary. 

FINRA is dedicated to protecting investors and safeguarding market integrity in a manner that facilitates vibrant capital markets. The basic tenets of FINRA are as follows: 

  • That every investor should receive the basic protections they deserve
  • That every securities product advertisement used is truthful and not misleading
  • That anyone who sells a securities product has been tested, licensed, and qualified
  • That investors receive complete disclosure about the investment product before purchase
  • That any securities product sold to an investor is suitable for that investor’s needs

How does FINRA utilize technology?

FINRA uses innovative AI and machine learning technologies to closely monitor the market and provide the necessary support to investors, policymakers, regulators, and stakeholders. With the help of technology, FINRA oversees over 624,000 brokers throughout the U.S. and analyzes billions of market events each day. 

Why does FINRA matter for my firm?

It is absolutely critical that firms of all sizes at least have an ongoing cybersecurity program. Here is a fantastic template provided by FINRA themselves for small firms: linked here

It’s also crucial that your firm is aware of your local FBI (Federal Bureau of Investigation) and that you make a proactive plan in the event of a cybersecurity breach or attack. In the event your firm is victim to a cybersecurity attack, you should immediately do three things: 

  1. Contact your local FBI office.
  2. Complete the FINRA Risk Monitoring Analyst
  3. Contact your IT security team.

If you don’t have a qualified IT security team working on behalf of your firm, we recommend investing ASAP. If PK Tech can help support your business, get in touch with us here.