FINRA Believes Blockchain Could Impact its Regulatory Rules

FINRA, the self-regulatory organization for US brokers, could see some of its rules impacted by blockchain.

AccessTimeIconJan 19, 2017 at 4:00 p.m. UTC
Updated Sep 11, 2021 at 1:00 p.m. UTC

FINRA believes the widespread use of blockchain could come to impact its core business practices.

The self-regulatory organization for US brokers published a new report on blockchain tech yesterday that offers both a broad overview of the tech from the context of its industry, as well as its take on its potential impact on the brokerage sector. FINRA has been open about its work on the technology (in conjunction with its members) in the past, though the release constitutes some of its most direct comments to date.

Most notably, FINRA said that, should the tech see broader use in the financial system, its own rules may need to be modified or changed.

As the report states:

"Many FINRA rules as well as some rules implemented by other regulators (such as the Securities and Exchange Commission (SEC)), that FINRA is responsible for examining or enforcing with respect to broker-dealers, are potentially implicated by various DLT applications."

Specifically, the tech could affect how FINRA members self-regulate in the areas of AML/KYC, asset verification, business continuity, surveillance and payments, among others.

Perhaps unsurprisingly, recordkeeping rules may also be turned on their head.

"For example, a DLT application that seeks to alter clearing arrangements or serve as a source of recordkeeping by broker-dealers may implicate FINRA's rules related to carrying agreements and books and records requirements," the report’s authors note.

The report goes on to give a high-level overview of the impact of DLT in the debt and derivatives market, as well as explanations of how various industry stakeholders are experimenting with the technology.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.