FINRA Reminds Members of Regulatory Obligations When Using Generative Artificial Intelligence and Large Language Models
Artificial intelligence (AI), including large language models (LLMs) and other generative AI (Gen AI) tools, present promising opportunities for member firms to enhance their products and services for investors and achieve operational and compliance efficiencies. As member firms incorporate the use of Gen AI or similar tools into their businesses, they should be mindful of the potential implications for their regulatory obligations. In addition, FINRA reminds its member firms that FINRA’s rules–which are intended to be technology neutral–and the securities laws more generally, continue to apply when member firms use Gen AI or similar technologies in the course of their businesses, just as they apply when member firms use any other technology or tool.
• FINRA Regulatory Notice 24-09 (June 27, 2024): FINRA Reminds Members of Regulatory Obligations When Using Generative Artificial Intelligence and Large Language Models
FINRA Adopts Amendments to Enhance Post-Trade Transparency in the U.S. Treasury Securities Market
FINRA adopted amendments to disseminate individual transactions in active U.S. Treasury securities at the end of the day and historically, and to set related fees for members and other professionals who choose to subscribe to the new data set. This new transaction-level data will be publicly available and free of charge on FINRA’s website for non-professionals’ personal, non-commercial purposes on a next-day basis.
The amendments relating to the end-of-day data product became effective on March 25, 2024, and the amendments relating to the historic data product became effective on April 1, 2024.
• FINRA Regulatory Notice: 24-06 (March 8, 2024): FINRA Adopts Amendments to Enhance Post-Trade Transparency in the U.S. Treasury Securities Market
FINRA Adopts Amendments to Improve the Accessibility of Order Routing Disclosures for NMS Securities
FINRA adopted new Rule 6151 (Disclosure of Order Routing Information for NMS Securities) to require members to submit to FINRA for centralized publication the order routing reports required under the SEC’s Rule 606(a) (Rule 606(a) Reports). These amendments become effective on June 30, 2024. Therefore, members will be required to submit their Q2 2024 Rule 606(a) Reports to FINRA no later than July 31, 2024.
• FINRA Regulatory Notice: 24-05 (February 26, 2024): FINRA Adopts Amendments to Improve the Accessibility of Order Routing Disclosures for NMS Securities
FINRA Adopts FINRA Rule 3110.19 (Residential Supervisory Location) and FINRA Rule 3110.18 (Remote Inspections Pilot Program), and Announces End of Temporary Relief Related to Updates of Office Information on Forms U4 and BR
FINRA is issuing Regulatory Notice 24-02 to announce the effective dates of two new supplementary materials under FINRA Rule 3110 (Supervision) as follows:
- Rule 3110.19 (Residential Supervisory Location) became effective on June 1, 2024; and
- Rule 3110.18 (Remote Inspections Pilot Program) became effective on July 1, 2024.
The rule text for Rules 3110.18 and 3110.19 is available in Attachment A.
In addition, FINRA announced May 31, 2024 as the end date of the regulatory relief set forth in Regulatory Notice 20-08 with respect to the obligation of firms to maintain current information for employment addresses and branch offices on specified uniform registration forms. In light of these changes, firms are encouraged to consult with FINRA’s Membership Application Program Group as they consider the materiality of any potential increase in the number of offices or locations.
- FINRA Regulatory Notice: 24-02 (January 23, 2024): FINRA Adopts FINRA Rule 3110.19 (Residential Supervisory Location) and FINRA Rule 3110.18 (Remote Inspections Pilot Program), and Announces End of Temporary Relief Related to Updates of Office Information on Forms U4 and BR