The Financial Industry Regulatory Authority (FINRA) plans to make regulatory changes in the crypto industry. This move follows the regulatory authority recording an increase in retail investors in the United States.
Investors Lack Financial Literacy, Says FINRA
Additionally, FINRA’s VP for Investor Education, Gerri Walsh, says concerned about the low level of financial literacy in America.
Evidence related to this can be found in the FINRA Investor Education Foundation (FINRA Foundation) and the Global Financial Literacy Excellence Center (GFLEC) survey of 2019.
The study examined over 15,000 Americans between the ages of 25 to 65. Investors in the United States had “alarmingly low” levels of financial literacy. Also, citizens said they lack the confidence and ability to meet their financial goals.
Robert Cook, CEO of FINRA, said that the regulation changes would protect investors as the crypto industry continues to balloon.
Tweaks in Crypto Rules
During a virtual conversation with the Securities Industry and Financial Market Association CEO, Robert Cook outlined the organization’s priorities for 2022.
Cook said that the organization would not make sweeping changes in crypto-related rules.
The CEO points out, “We are not looking to regulate or fundamentally change the regulatory structure.”
Also, he states that massive changes in crypto regulation are not in the hands of FINRA.
The Securities Exchange Commission, Congress, and other federal regulators will decide the rules for the road ahead.
However, updates and tweaks to existing rules or what FINRA calls “early-stage, concept release type of notice” will be made.
Furthermore, Cook adds that they looked at rules related to the “sale of crypto assets by or through member firms.”
The CEO stressed that the focus is on “advertising and disclosure requirements” related to cryptocurrency.
However, Cook admits that the increasing number of crypto regulators could confuse investors. Accordingly, firms selling digital assets will have to update their disclosure policies.
FINRA says that to protect investors, they want to talk about the present rules related to crypto. Additionally, the discussion will include how these rules will evolve in the future.
Working Theme of 2022 For FINRA
The regulatory authority has said that their working theme for 2022 is protecting retail investors. The CEO notes that this is in light of the “surge of retail investors we have seen coming into the market in recent years.”
Crypto is just one of the items in FINRA’s long list of regulatory priorities. The regulatory authority will publish its examination priorities for 2022 next month.
FINRA is a not-for-profit organization in the United States that protects investor rights and regulates one part of the securities industry in the country.