FINRA to Upgrade Registration System

Michael Volpe

After spending a decade in finance, Michael Volpe has been a freelance investigative journalist since 2009. His work has been published locally in the Chicago Reader, Chicago Crusader, Chicago Heights Patch, and New City. Nationally, Volpe's work has appeared in a wide variety of publications including the Washington Examiner, the Daily Caller, Crime Magazine, the Southern Christian Leadership Conference Newsletter, and Counter Punch. Volpe has been recognized by whistleblowers as leading the charge in getting their stories out. His first book Prosecutors Gone Wild was published in October 2012, his second book The Definitive Dossier of PTSD in Whistleblowers was published in February 2013 and his third book Bullied to Death was published in August 2015.

FINRA

FINRA to Upgrade Registration System

March 12, 2019

FINRA’s system for registering broker/dealers is getting an upgrade and moving into the 21st century. FINRA’s Central Registration and Depository (CRD) system is the central licensing and registration system for FINRA, all of the Securities and Exchange Commission, and even the fifty state financial regulators. The last time it was upgraded was in 1999 and an upgrade is on its way.

Derek Linden
Derek Linden

Derek Linden is FINRA’s executive vice president of Registration & Disclosure and he was the latest guest on their podcast, Unscripted, where he spoke more about the upgrade.

Among other things, CRD allows clients and potential clients to research the background of their broker or potential brokers.

“Before CRD, if you wanted to register as a broker, you had to file an application with the NASD, FINRA’s predecessor, each state you wanted to be licensed in, and each other SRO (self-regulatory organization) or exchange you wanted to be registered in. The CRD system actually was started in the 1980s. It was a paper and pencil system with some automation “,Linden said.

He also mentioned that the CRD system became fully automated with the last upgrade in 1999 and one thing which the current upgrade will focus on is moving the stored data into a cloud system.

“This is an opportunity to use that technology (cloud) and those open architecture solutions to delivery an easier system for users to get their work done.” Linden said. According to Linden,The CRD upgrade was first announced in June 2018 and is a multi-year project,

“The transformation aims to increase the utility and efficiency of the registration and disclosure process for firms, investors and regulators, as well as to reduce compliance costs for firms. FINRA’s Board of Governors has approved moving forward with the project, which FINRA expects to complete in 2021.” FINRA said in a press release at the time.

“This important initiative will strengthen an essential function of the securities industry,” said FINRA President and CEO Robert W. Cook in that initial press release. “The transformation will allow FINRA to develop systems that help firms effectively maintain compliance programs and reduce compliance costs, while continuing to operate and enhance BrokerCheck as an essential tool for investors.”

“The CRD is an important tool for the financial services industry, regulators, and investors. We applaud FINRA for undertaking this initiative to upgrade the system’s operations,” said Joseph Borg, President of the North American Securities Administrators Association (NASAA) and Director of the Alabama Securities Commission.

The CRD system moving to the cloud is part of a larger move by FINRA to move data to the cloud.

“Today, FINRA has more than 30 petabytes of data in the cloud—or about 60 million years’ worth of MP3 music. With the cloud, FINRA has been able to build a massive data lake that allows its regulatory staff to conduct business more efficiently and more effectively than ever.” FINRA said in promoting another podcast.

FINRA, or the Financial Industry Regulatory Authority, was formed in 2007, when the regulatory arms of the NASD and the NYSE merged.

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