Thu. Jun 20th, 2019

Planet Compliance

Innovation & Regulation in Finance

US regulator reports on DLT and the Implications of Blockchain for the Securities Industry

2 min read

The U.S. Financial Industry Regulatory Authority (FINRA) today published a report on Distributed Ledger Technology and the implications of Blockchain for the Securities Industry.

This paper provides an overview of distributed ledger technology, highlights some key applications being explored in the securities industry and potential impact of the technology, and discusses key implementation and regulatory considerations for broker-dealers.

FINRA welcomes an open dialogue with market participants to help proactively identify and address any potential risks or hurdles in order to tap into the full potential of DLT, while maintaining the core principles of investor protection and market integrity. Technological innovations in the industry, operating in accordance with these core principles, have the potential to provide investors with greater access to services and enhanced experiences, offer firms increased operational efficiencies and enhanced risk management, and enable further transparency in the marketplace.

This paper is intended to be an initial contribution to an ongoing dialogue with market participants about the use of DLT in the securities industry. Accordingly, FINRA is requesting comments from all interested parties regarding all of the areas covered by this paper. FINRA also requests comments on any related matters for which it would be appropriate to consider additional guidance, consistent with the principles of investor protection and market integrity, based on DLT applications and their implications for FINRA rules.

Comments are due by 31 March 2017 and the FINRA statement together with the full report can be found here.

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