The Financial Industry Regulatory Authority Inc. won't be nominating candidates for a small-firm seat on the board in its election this year.
The Financial Industry Regulatory Authority Inc. won't be nominating candidates for a small-firm seat on the board in its election this year.
Instead of Finra’s putting up candidates approved by the nominating and governance committee, aspirants will have to obtain a certain number of petition signatures from member firms to get on the ballot.
"The committee is hoping to create a less negative election environment for small firms," the email said.
In recent years, petition challengers from small firms have been successful in beating out nominating-committee candidates, who tend to be seen by some small firms as too close to Finra management.
Last August, for example, all the outside challengers for three open small-firm seats won out over people picked by the nominating committee.
"I think this is a great development," said John Busacca, owner of the Broker Dealer Exchange LLC and one of the founders of the Securities Industry Professional Association, which represents firms and registered representatives.
"Let the members decide" whom to nominate, he said.
Mr. Busacca's group has been active in recruiting and campaigning for outside candidates.
Finra said it would issue an election notice in April with information about the petition process.
