FINRA Launches Machine-Readable Rulebook InitiativeThe Technology is Designed to Enhance Firms' Compliance Efforts, Reduce Costs and Aid in Risk Management
FINRA developed the machine-readable rulebook through the creation of an embedded taxonomy -- a method of classifying and categorizing a hierarchy of key terms and concepts -- that was applied or "tagged" to the 40 most frequently viewed FINRA rules. The taxonomy allows users to apply an enhanced search feature to find specific content by starting with a broad topic and then narrowing down to more specific topics through sub-categories and combinations of multiple terms.
SIDE BAR: For a trip down taxonomy memory lane, read: "FINRA's Innovation Outreach Initiative And Fifth Harmony Taxonomy As Utilized In Fintech AI" (BrokeAndBroker.com Blog / July 31, 2018)
The BrokeAndBroker.com Blogobtained previously unreleased video of
TAXONOMY INITIATIVE a/k/a The Combo:
Somewhere at a Small FINRA Member Firm
Murray is the CEO, FINOP, CCO, Director of International Sales, Toilet Paper Changer, and Fixer of the 20-year-old Fax Machine.Harriet is Murray's daughter, handles the brokerage firm's margin issues, and calms down some angry customers from time to time.
As part of this initiative, FINRA has created a prototype of a rulebook search tool-the FINRA Rulebook Search Tool (FIRST). This enhanced search feature is designed to help users, including market participants and members of the public alike, to efficiently identify potentially relevant FINRA rules and their associated requirements using the taxonomy terms. FINRA has launched the FIRST search feature through a user interface on the FINRA website.
In addition, FINRA is offering access to the taxonomy terms that have been tagged to each of the 40 rules through an Application Programming Interface (API) -- a software intermediary that allows two applications to communicate and interact with each other. This feature can enable member firms seeking to automate compliance functions to link the FINRA rule content and the taxonomy terms to their internal compliance policies and procedures, where appropriate.
The taxonomy applied to the FINRA rulebook is also made available through an API interface. APIs can facilitate how developers integrate new application components into their existing technology frameworks. Through the rulebook API on the FINRA API Platform, firms can ingest the rule content along with taxonomy terms applied to each of the 40 tagged FINRA rules. This would enable member firms to develop an integration that links the rule content and taxonomy terms to their internal compliance policies and procedures, where appropriate.