FINRA Issues Notice on Comprehensive Automated Risk Data System

FINRA

On September 30, FINRA issued Regulatory Notice 14-37 requesting comments on a proposed rule to implement the Comprehensive Automated Risk Data System (CARDS). FINRA has described CARDS as a rule-based program that would allow FINRA to collect on a standardized, automated, and regular basis, account information, as well as account activity and security information that a firm maintains as part of its books and records. This would exclude the collection of personally identifiable information for customers, including account name, account address and Social Security number. The rule proposal would be implemented in two phases. The first phase would require carrying or clearing firms (approximately 200 firms) to periodically submit in an automated, standardized format specific information that is part of the firms' books and records relating to their securities accounts and the securities accounts for which they clear. The second phase of CARDS would require fully-disclosed introducing firms to submit specified account profile-related data elements either directly to FINRA or through a third party. The comment period on the proposed rule expires December 1, 2014.