In a post by its Head of Examinations, Jim Reese, the Financial Industry Regulatory Authority, Inc. (“FINRA”) announced a series of meaningful changes to its examination program as part of its “FINRA Forward” initiative. The changes are designed to make the exam process more transparent and efficient, and more closely tied to risk assessments. These changes signal a shift toward a more collaborative, streamlined regulatory approach, which aims to identify and resolve compliance issues early, before they escalate into formal enforcement actions.
A More Transparent Process
FINRA has begun providing member firms with advance notice of the quarter in which their examination is expected to be announced, giving firms additional time to prepare and allocate internal resources. FINRA has also published new guidance detailing how it assesses member firm risk and categorizes members, offering greater visibility into the factors that shape examination scope and frequency.
Risk-Informed Examinations
FINRA has recalibrated its examination schedules so that certain lower-risk firms will be examined every six years rather than every four, while remaining subject to ongoing risk monitoring that could trigger more frequent reviews if circumstances change. FINRA has also refined its approach to initial examinations for newly approved firms by drawing more heavily on information gathered during the membership application process, enabling a more targeted first exam.
Notably, total external data requests fell 12% in 2025 compared to the prior year, and policy-driven initial trade blotter requests dropped by more than 50%, reflecting FINRA’s effort to leverage data it already has on hand rather than placing additional burdens on firms.
Expanding the Information Exchange
FINRA is making the examination itself more of a two-way exchange: firms now have the option to receive preliminary findings in writing throughout the exam, rather than waiting for a consolidated report at the end. This allows firms to address concerns or supply additional context earlier in the process, which can influence the final disposition of findings. At the conclusion of the exam, the firm’s risk monitoring analyst remains available as a resource to discuss remediation efforts and other actions a firm takes to address identified issues.
Changing How FINRA Works
FINRA’s efforts are reinforced by a broader internal reorganization that unifies risk monitoring, surveillance, examinations, investigations, and enforcement into a single Regulatory Operations reporting structure, positioning FINRA to reduce regulatory duplication and identify emerging issues more quickly. When insights from FINRA’s work with one member firm spotlight issues relevant to others, FINRA aims to create a feedback loop by synthesizing exam intelligence and reporting findings more frequently across its membership—without disclosing proprietary information—to help firms spot and mitigate risks before they escalate.
Looking Ahead
FINRA has signaled that it plans to further streamline examinations through automation and the use of artificial intelligence capabilities, including tools to accelerate the review of Written Supervisory Procedures, while continuing to solicit member feedback to guide future improvements.
Read FINRA’s press release for additional information.
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