Nashville Standard

United States Senator Bill Hagerty has voiced concerns over a proposal by the Financial Industry Regulatory Authority (FINRA) to expand reporting requirements for broker-dealers. As a member of the Senate Banking Committee, Hagerty addressed his apprehensions in a letter to Securities and Exchange Commission Chairman Gary Gensler and FINRA CEO Robert Cook.

Hagerty's letter critiques FINRA's proposed Rule 6500 Series, stating that it would unnecessarily raise costs for both retail investors and broker-dealers. He argued that "the Proposed Rules are yet another example of FINRA acting beyond its traditional mandate as a member-driven self-regulatory organization." Hagerty further stated that approving these rules "would harm market participants, including retail investors, violate legal requirements around public notice and comment, and sanction FINRA’s unnecessary and potentially harmful overreach with respect to the securities lending market."

The letter highlights concerns about the lack of adequate economic analysis within the proposal, suggesting it fails to provide transparency regarding its potential impacts on the broker-dealer industry, capital markets, and investors. Additionally, confidentiality issues for lenders and borrowers were raised as part of the critique.

Senator Hagerty concluded his letter by seeking explanations concerning FINRA’s rulemaking process and its rationale behind this proposal.