FINRA Regulations

FINRA (Financial Industry Regulatory Authority) is the SEC-designated self-regulatory organization (SRO) for broker-dealers, operating under SEC oversight pursuant to Section 15A of the Securities Exchange Act of 1934. FINRA's rulebook (the FINRA Manual) covers conduct rules, uniform practice rules, and technology-relevant obligations including: FINRA Rule 4370 (Business Continuity Plans, requiring documented BCPs and emergency contact procedures); FINRA Rule 3110 (Supervision, requiring supervisory systems for all business activities including electronic communications review); FINRA Rule 3120 (Supervisory Control System, requiring annual testing of supervisory procedures); FINRA Rule 4511 (Books and Records Maintenance, requiring preservation of all required records per SEC Rule 17a-3/17a-4 standards); and FINRA Rule 2010 (Standards of Commercial Honor) which encompasses a broad range of conduct requirements. FINRA also administers CAT (Consolidated Audit Trail) reporting obligations under SEC Rule 613, requiring all FINRA members to report order and execution data to FINRA's CAT system.

The technology obligations most consequential for engineering teams are the records and surveillance requirements. SEC Rule 17a-4 (implemented by FINRA Rule 4511) requires broker-dealers to preserve records on WORM (Write Once, Read Many) or equivalent non-rewritable media with specific indexing, accessibility, and third-party access provisions. Cloud-based records storage for broker-dealers requires SEC no-action relief (e.g., the 2021 SEC no-action letter to FINRA) or platforms that technically satisfy WORM requirements — a non-trivial architecture constraint. FINRA's electronic communications surveillance requirements under Rule 3110 require broker-dealers to implement lexical and behavioral surveillance of all electronic communications channels used for business purposes, including emerging channels: WhatsApp, Signal, and other mobile messaging platforms. The $1.8B+ in industry-wide fines for off-channel communications (2022-2023) has driven significant investment in mobile device surveillance infrastructure and communications archiving platforms.

CAT (Consolidated Audit Trail) reporting is the most data-intensive FINRA technology obligation. CAT requires broker-dealers to report to the FINRA CAT system all order events — receipt, modification, cancellation, routing, execution — with timestamps accurate to one millisecond for manual orders and one microsecond for automated systems, and with customer and account identification via CAIS (Customer and Account Information System) identifiers. CAT reporters must implement TLS-encrypted submissions to FINRA's CAT reporting engine, with daily reconciliation of order counts and error correction within defined cure periods. The data volumes are enormous: the CAT system receives approximately 100 billion records per day from all reporting firms. For broker-dealers with complex OMS/EMS stacks, CAT linkage — tracing an order through all its events across multiple systems — requires event correlation logic that must handle partial fills, multi-leg orders, and cross-system routing without generating orphan records.

We architect FINRA-compliant broker-dealer technology stacks with WORM-compliant records storage using cloud-native immutable storage services (AWS S3 Object Lock, Azure Blob immutable storage) with SEC 17a-4 compliant indexing and third-party access configurations. Our CAT reporting implementations handle order event correlation across OMS, EMS, and execution venue systems, generating microsecond-timestamped event records with CAIS identifier linkage. For electronic communications archiving, we integrate with enterprise archiving platforms (Global Relay, Smarsh, Veritas) and implement mobile device management configurations that capture regulated messaging channels.

Compliance-Native Architecture Guide

Design principles and a structured checklist for building software that is compliant by default — not compliant by retrofit. Covers data architecture, access controls, audit trails, and vendor due diligence.