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FINRA is considering lightening the “heightened supervisory plans” over messages sent using WhatsApp and other off-channel communications

May 13, 2025 //  by Finnovate

FINRA is looking to lighten the supervision burden on nearly 80 firms that reached settlements before the start of the year over messages sent using WhatsApp and other texting systems. Financial Industry Regulatory Authority executives said they’re considering revisions to the “heightened supervisory plans” that 77 industry firms were subjected to as part of settlements reached over their use of so-called off-channel communications. Concerns over fairness gave rise to FINRA’s proposal to modify the regulatory requirements imposed on firms that reached settlements pre-2025. FINRA’s blog post, written by CEO Robert Cook and Executive Vice President Greg Ruppert, notes that firms that reached settlements after the start of this year were subject to far less onerous terms.  Those companies, which included Charles Schwab, Blackstone and the private equity giant KKR, avoided various other mandates imposed on other firms. They, for instance, don’t have to file an application to continue their membership in FINRA and agree to a heightened supervision plan (HSP) meant to prevent further violations. FINRA’s blog cautions that the contemplated changes won’t make things equal between firms that reached settlements this year and those that did before. “FINRA cannot do that because of the differences built into the SEC settlements,” according to the blog. “In addition, under applicable rules FINRA cannot eliminate the HSPs altogether for the pre-2025 settling firms.” Cook and Ruppert wrote in FINRA’s blog that they were initially planning to ask the SEC to eliminate heightened supervision plans for member firms fined for off-channel violations. But that can’t be done now that the SEC has rejected the request to modify the initial settlements. FINRA, a self-regulatory organization deputized by the SEC to oversee the brokerage industry, has no power to alter SEC deals on its own.

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