For the last couple of years, FINRA has been working to revolutionize the digital experience of firms, particularly when it comes to registration and disclosure. Now many of these changes have come to life through the new FINRA Gateway and a new Form U4 filing experience.On this episode, we talk to Credentialing, Registration, Education and Disclosure's Noah Egorin and Technology's Claudia Holanda to hear about recent changes and what firms and registered reps alike can expect going forward as FINRA continues to iterate and improve the digital experience.
Something's coming, something good, if I can waitSomething's coming, I don't know what it isBut it is gonna be great
Bill Singer's Snarky Comment: CRED??? Someone actually thought we needed to change RAD to CRED? Wow, like, dude, that's totally rad, even if it's no longer the '80s. Maybe FINRA should re-think the mere CRED thing and expand that acronym into something like the "Strategic Transitional Repositioning Efficiency Excellence Team for Credentialing, Registration, Education and Disclosure" or "STREET CRED."CRED is short for Credentialing, Registration, Education and Disclosure. It's the unit that many people probably formerly knew is RAD, or Registration and Disclosure. However, as our unit has evolved to include testing and continuing education programs, we felt it was important to rename the unit to really better represent the breadth of responsibility.
[I]t's the same U4, it's a new filing experience. So, we always want to highlight that. It's really important to understand that the questions haven't changed on the form. The requirements of the form haven't changed. The guidance around the form hasn't changed. Just the way that FINRA collects that information has changed.
Bill Singer's Snarky Comment: Lemme explain this to you. They created statutory forms -- not mere forms but ones that are statutory, which, I'm guessing means that they look like "David" in the Galleria dell'Accademia, Florence, Italy, or "Liberty" in New York Harbor, or, that headless "Winged Victory of Samothrace" in the Louvre in Paris, France. Moreover, they've created those statutory forms so they "don't have to let you interact with the form to create them." Gee, that's nice but it might be nicer if I really understood why they don't want me to interact with the form. Maybe if I ponder it for a while, I will grasp the point. Nah . . . didn't work. I pondered. I'm still lost. Among the things that are still tripping me up is the difference between FINRA's so-called ability to separate data collection from the data collection experience. The data collection experience? I thought they broke up when Jimi Hendrix left in 1967.[W]hile we need to create those statutory forms, we don't have to let you interact with the form to create them. So, our ability to separate data collection or the data collection experience from the form itself creates those opportunities, which we hope to bring forward in future releases and updates to the filing experience. . . .
[O]nce again, that would become available in parallel to the classic filing experience with a transition period to then retire the old functionality. But that'll happen over a period of time. And then you'll see the other forms come online behind that. . . .
A lot of the incremental change is driven by our mentality as an enterprise, not just from the CRD team. But once again, if we built in smaller chunks, we have time to fix things. We have time to introduce items to firms in smaller pieces so they can provide feedback. We have the ability to help firms adjust to those transitions as opposed to just dropping 21 years' worth of functionality. And then when you start adding in the rest of FINRA's applications, the Report Center, FOCUS, the form filing applications, it becomes a very big change when you're not just talking about building a new piece of software that works exactly the same. Firms have built procedures, operations, repeatable processes, testable operations based on the software we've built. And we need to give people a chance to adopt, change and make sure we're adding value along that path. So, if we do make a decision that doesn't create value for the firms, creates a burden, we have the ability to quickly address that.
Bill Singer's Snarky Comment: I always wondered what happened to that Dracula fellow but now I know. He's part of the STREET CRED team. Dracula is apparently on FINRA's payroll because someone at FINRA is putting a hard stake in the ground.So, we haven't yet announced a date and it will take time. We don't want to just put a hard stake in the ground and say "this is the date" because we are being driven by the data that we receive and the feedback we receive. If we see adoption not occurring as quickly as we need to, we can move that time frame. If we see feedback that says you got it wrong or it really needs more to be able to really replace what we do because of this very good reason, we can do that. And similarly, what we found is if we set a date and something happens, the communication process for us to help the industry understand, "hey, we had to move that date," takes effort and time and people may miss it. So, we want to communicate in smaller chunks.We don't want to say on a specific date it's going to happen because we want to be agile, we want to be flexible and want to be receptive to the industry's feedback, concerns and communication. And we've already done that once. We originally had a date for the U4, the industry's impact to COVID, it was said, "wait a minute, this is a really bad time for us to make that change." And we had the ability to change our path.To be honest, originally, we were going to just hard switch that U4 one day. They said, "you know what, parallel is better," and we were able to take that feedback and move forward. And in some cases, if our software has flaws or bugs, we have the ability to adjust that. And those are all important factors as we decide hard dates, soft dates or whatever other dates we need to pick. But we will try to communicate sufficiently. We will try to, as much as possible, communicate the parallel time frames. At this point, we're trying to give at least 90 days before we shut any feature down and try to keep parallel nature running when possible.