How FINRA Turns Member Feedback Into Action

As a self-regulatory organization, FINRA doesn't operate in a vacuum. Our effectiveness depends on understanding what is happening in the industry, hearing directly from our members, and translating that feedback into meaningful action. This engagement is a two-way street, and members might not realize just how many opportunities exist to make their voices heard.

On this episode, Kayte Toczylowski, Senior Vice President, Member Firm Experience, discusses the many channels available for members to engage with FINRA, from formal advisory committees to regional representation to CEO roundtables. Learn how member feedback directly shapes our rulemaking process, drives internal improvements, and informs the work we do.

Resources mentioned in this episode:

FINRA 2026 Involvement and Election Process Overview

FINRA Advisory Committees

FINRA Indication of Interest Form

Webinar: How to Respond to FINRA Requests for Comment

FINRA Forward: A Year of Progress

FINRA Forward

FINRA Quarterly Regulatory Policy Agenda

Ep. 181: Making Your Voice Heard Through FINRA Member Engagement

Ep. 185: How FINRA Is Streamlining Data Requests

Ep. 187: How FINRA Is Enhancing Member Firm Examinations

Blog Post: FINRA Forward's Rule Modernization-An Update

Blog Post: Vendors, Intelligence Sharing and FINRA's Mission

Blog Post: FINRA Forward Initiatives to Support Members, Markets and the Investors They Serve

Blog Post: A Progress Update on Rule Modernization

Listen and subscribe to our podcast on Apple Podcasts, Google Podcasts, Spotify, YouTubeor wherever you listen to your podcasts. Below is a transcript of the episode. Transcripts are generated using a combination of speech recognition software and human editors and may contain errors. Please check the corresponding audio before quoting in print.

FULL TRANSCRIPT

00:00 - 00:59
Margherita Beale: As a self-regulatory organization, FINRA doesn't operate in a vacuum. Our effectiveness depends on understanding what's happening in the industry, hearing directly from our members, and translating that feedback into meaningful action. But engagement is a two-way street, and members may not realize just how many opportunities exist to make their voices heard. On this episode, we will explore the many channels available for member firms to engage with FINRA and learn how member feedback directly shapes our rulemaking process, drives internal improvements, and informs the work we do.

Welcome to FINRA Unscripted. I'm your host, Margherita Beale. Here to talk to us today about how FINRA incorporates member feedback into action is Kayte Toczylowski, Senior Vice President, Member Firm Experience. Kayte, welcome back to the podcast.

00:59 - 01:02
Kayte Toczylowski: Thanks for having me. I'm excited to be here today.

01:02 - 01:14
Margherita Beale: Fantastic. So many of our listeners know who you are, but for those that may not be familiar with you, can you give us a brief overview of who you are and what you do at FINRA?

01:14 - 01:51
Kayte Toczylowski: Of course. So in leading member firm experience, my main role is to ensure that FINRA has a very strong and active engagement program with member firms. That includes doing a lot of industry outreach through formal FINRA committees and other ad hoc meetings to understand firm feedback. And then also ensuring that FINRA is producing educational resources and content so that member firms have the information they need to comply with FINRA rules and regulations, protect investors, and make sure that our markets continue to run strong.

01:51 - 02:06
Margherita Beale: So before we dive into it all, can you start by giving our listeners a brief overview of what FINRA Forward is and why it matters to member firms to help inform our discussion?

02:06 - 03:32
Kayte Toczylowski: I sure hope that our listeners do already have an understanding of FINRA Forward, as it has been a major initiative of FINRA for over a year. It is really FINRA's focus on continuous improvement in ensuring that FINRA is ready for the future. And that includes modernizing FINRA rules so they make sense for how the markets and the industry operate today. Empowering compliance by providing tools and resources to member firms, ensuring that they can protect their investors and safeguard the markets. And then lastly, using our position in the industry to help safeguard against cyber fraud and threats. We want to ensure we are providing firms with actionable intelligence to protect their firm and their investors. And FINRA Forward really is a great example of FINRA's role as a self-regulatory organization, a membership organization. And each of those efforts that I just outlined are focused on providing value to member firms in that effort to further FINRA's mission of investor protection and market integrity. That being said, we can't action FINRA Forward without really deep engagement with member firms. So, to sum it all up, FINRA Forward is truly an effort of working together to drive FINRA forward.

03:32 - 03:43
Margherita Beale: Great overview. That leads perfectly into our conversation. Speaking of engagement, can you walk us through the channels that are available for members to provide feedback and engage with FINRA?

03:43 - 10:33
Kayte Toczylowski: Yes, there's a lot of channels in order to do that. So there's some that are really formal through committees. And then there are some that are more ad hoc through attending various forums or events. So let me give you an overview of all of those. A great place to start if you're looking to learn more about all of these different engagement opportunities is a special notice that FINRA publishes each year, typically in the spring. The 2026 engagement notice was published on March 17. And that's going to give a full overview of all of the more formal opportunities to engage with FINRA. So, if you haven't read that yet and you're interested in getting engaged, take a look at that notice and you can see how to get involved.

Let me give you a deep dive into some of the more popular opportunities that I want to ensure member firms that are listening understand. First, it's the advisory committees. FINRA has four committees that review all FINRA rule proposals before they're finalized and presented to FINRA's Board of Governors. That's the Membership Committee, the Large Firm Advisory Committee, the Small Firm Advisory Committee, and the Investor Issues Committee. Each of these committees meet on a quarterly basis ahead of the board meeting, and they meet off-cycle as needed. If an issue comes up that needs to be discussed, we make sure that we schedule time with the appropriate committee.

In addition to reviewing rule proposals, the committees also offer us insights into the issues that are being faced by the industry. So that could be outdated rules that are impacting how firms are currently executing their business, where rules might be getting in the way of how to do business. Or it could be new products or trends or emerging issues that they're seeing in the markets. The meetings are really productive, engaging, and dynamic conversations. They always bring together FINRA senior leaders and the industry to discuss what's working, what's not working, and how we can work together to protect investors in the markets.

Now, a little less formal are our regional committees. Some of our member firms that have been engaged in the industry for a while may remember these as district committees, but we re-formed them into regional committees a while back. What remains the same from district committees is each district within the regions still have representation on the regional committees and they're elected. So, I think this is important to underscore for our listeners because if you are a member firm and trying to understand how to get feedback to FINRA, you have representatives from your districts that are serving on these regional committees right now. So if you're not aware of that, I urge you to go to FINRA.org and take a look at the regional committee representatives. You can find exactly who represents your district, and then you will be able to contact that person and provide feedback. The regional committees meet twice a year, and they don't review rule proposals, but they do engage in active dialogue with FINRA senior leaders on a variety of issues that are facing the markets. Again, that could be rules that need to be modernized. It could be on different tools or resources or guidance that they're hoping to get from FINRA. And then it's just an active dialogue with each other so firms can share effective practices with each other. So, make sure that you find who your regional committee representative is and give them a call so you can get involved and have your voice heard.

Now, outside of advisory and regional committees, there's many other different groups that FINRA meets with on a routine basis. And they are all outlined in that special engagement notice that I talked about. Some of them are more subject matter based. And then we also have groups that meet together to discuss FINRA qualification examinations and ensure that the qualification examinations are meeting their purpose. And then committees that are focused on continuing education programs and ensuring that the programs that FINRA is producing are helpful for the industry. And lastly, when I'm talking about committees, I do want to urge anybody that is interested in getting involved not only to read that engagement notice, but to also submit an indication of interest. You can find that form on FINRA.org and it will allow you to tell us a little bit more about yourself and to indicate which committees that you're interested in serving on. Committees do have term limits, so we're constantly appointing new committee members. So, I definitely urge you to submit an indication of interest if you want to get involved.

And then I do want to also highlight other ways to have your feedback heard outside of committees. So, like I said, we have these formal channels, but then we also have informal forums where you can meet with FINRA leaders and discuss issues or opportunity areas. So, first I want to highlight our CEO roundtables. Robert Cook, FINRA's President and CEO, holds a handful of these forums every year. We just had one in New York City recently, and then earlier in 2026, we held one in San Francisco. Later this year, we're going to be heading to Atlanta and Dallas. We do a wide invitation to member firms that are located in that area and invite the CEOs and CCOs of those firms to come and have a conversation with us. There's no agenda, it's very broad, candid dialogue, and it really gives firms the opportunity to have that conversation with me and Robert Cook. Let us know how things are going and opportunity areas for FINRA. We also have different subject matter roundtables that we'll hold.

We do see FINRA as a unique opportunity as an SRO where we can be a convener in the industry. We can bring together not only FINRA leaders and member firms, but also trade associations and other regulators to have conversations about the issues facing our industry today. So that includes an upcoming roundtable that we're hoping to host on generative AI. And we've held roundtables in the past on how we can better empower member firm compliance, and how to modernize our branch rules and branch definitions. So, there's a lot of ways to get engaged with FINRA, and I definitely urge our listeners to find an opportunity to have their voice heard.

10:33 - 11:03
Margherita Beale: Wow, thank you for that great overview. There really are a lot of ways to engage with FINRA. For listeners, all of these resources and different ways to engage that Kayte mentioned will be included in the link in the resource section of the podcast episode. So keep an eye out for those if you are interested. But going back to something that you talked about, can you tell us a bit more about how firm feedback is part of the rulemaking process?

11:03 - 15:13
Kayte Toczylowski: This is such an important part of the rulemaking process. So let me go through two main areas where we ensure that we understand firm perspectives when we are proposing a new rule or updating an existing rule.

First, the comment letters. We offer a comment letter process on rule proposals. And our Office of General Counsel reads every single comment letter that comes in. And I can assure you of that; it is not a performative process. It's a process where we really look at how is this rule proposal or this concept going to affect the industry and how member firms operate and do business. So, when there's a request for comment, I urge you to participate. Make sure that you get your voice heard. And even if you agree with the rule proposal, make sure you comment on it. Those are just as important as if you have constructive feedback to provide us on the rule proposal. Sometimes I hear from firms, "I didn't comment because I totally agree." But when we are filing a rule with the SEC, they're looking to our comment letters to see how the industry feels on the issue. And if it's only negative comment letters, then they might view that rule proposal differently if there's also support for the proposal as well. So, the comment letter process is a very important tool for member firms to use to get involved in rulemaking.

And then, second, as I was mentioning earlier, the advisory committees play a very important role in the rulemaking process. So, ahead of every quarterly advisory committee meeting, for again those four committees that I discussed earlier (the Membership Committee, Large Firm Advisory Committee, Small Firm Advisory Committee, and Investor Issues Committee) they'll receive the different rule proposals that are going to be considered by the board that quarter. They have an adequate time to review these rule proposals so they can come prepared to discuss and give their feedback. Just like the comment letters, we take the feedback heard during the committee meetings very seriously. And again, it's not performative. It's not a check-the-box. We have very deep-dive conversations with each of these committees to understand how this rule will actually play out in the business.

So, we can have an intention of how we think the rule will play out, but we need to make sure that we're hearing from the people that are actually implementing the rule to ensure our intention is how it's actually going to be actioned. So these conversations at the advisory committee are very robust. Many times the advisory committee members will ask detailed questions, and our Office of General Counsel attorneys are in the room. The people that are writing the rule are in the advisory committee room to answer those questions. And then, based on that feedback, our Office of General Counsel attorneys may make changes to the rule itself, or may note what the feedback was in order to present it to the Board of Governors. Once our Office of General Counsel is in the boardroom, they do voice what they heard from each of those committees and the committee perspectives.

While we might not always make line edits to the rule proposal based on committee feedback, we will take that feedback into account on frequently asked questions that we roll out on implementation, and ensure committees have enough or ensure the industry has enough information that they need in order to adequately implement that new rule and understand it. So it's a lot of dynamic conversation. I also want to note that the advisory committees are made up of different sized firms and firms of all different business models. So, the feedback that we're getting is truly a great representation of the industry and ensure that it takes into account the different business models of firms.

15:13 - 15:35
Margherita Beale: Great. So, we've discussed some of these changes in recent podcast episodes, but since FINRA Forward started, there have been a number of internal changes that FINRA has implemented. Can you speak a bit to how those changes have been informed by member feedback?

15:35 - 18:42
Kayte Toczylowski: The best place for our listeners to start in learning the action that we have taken based on firm feedback is the FINRA Forward in Action Report. That reviews the one year of progress that we've made. It is a progress report of sorts, and it does a great job of explaining some of these improvements that we've made internally to help how firms are experiencing FINRA. So, if you haven't read that yet, I encourage you to do so.

One area that I would underscore is the need for transparency has been a theme that's come up in our outreach to member firms, whether that's through our committee meetings, roundtables, or any other forums where we've gotten feedback from firms. A lot of that feedback has pointed to the opportunity for FINRA to provide more information in more context ahead of regulatory outreach. So, a few examples of changes that we have made is first we've published information on the 11 risks that risk monitoring uses to assess risk in a member firm. Many firms were aware of that there were 11 risks and they knew that they were having conversations with their risk monitoring analyst about the firm's business. But we hadn't published a list of what those risks were and that was something that had come up from our committees in different firm outreach was that it would be helpful to have that context, understand what the risks were, so that firms could have better informed conversations with their risk monitoring analysts.

We also are now providing firms with advanced knowledge of when their FINRA examination will take place. So we started that this year. We're in conversations with firms, pointed to it would be very helpful to have some idea of when FINRA was going to come in to their firms so that they could better balance resourcing. They could better balance making decisions on different initiatives that the firm was considering implementing. If they knew a FINRA exam was going to be coming in the second quarter, they might then implement a major initiative in third or fourth quarter so that their compliance resources weren't being strained during the FINRA examination. So starting in 2026, we alerted firms of the scheduled quarter that their 2026 exam was currently scheduled for. Now, of course, there might be tweaks or changes, but this is an effort to provide more transparency into the process.

And lastly, I also want to talk about the transparency we're providing in the rapid remediation program. This is another great example of FINRA providing information to a firm before a more formal regulatory inquiry. In the Rapid Remediation Program, FINRA might see something that pops in one of our surveillance reports, and we can ask the firm about what that issue might be again before waiting for more of a formal inquiry.

18:42 - 18:49
Margherita Beale: So, looking ahead, what should member firms expect to see in practice as FINRA Forward continues?

18:49 - 19:37
Kayte Toczylowski: We are one FINRA, and we understand that firms don't always experience that. And that has also led to the creation of Member Firm Experience. This is a new function that I'm standing up to strengthen FINRA's engagement with member firms across our entire enterprise. And the goal of Member Firm Experience is strategic collaboration to help inform internal process improvements, prioritize resource development. and identify new opportunities that FINRA has to support firm compliance and strengthen investor protections. So, we understand that there's more work to be done and more internal changes that we can make to help provide more of this cohesive experience for member firms.

19:37 - 19:47
Margherita Beale: Thank you for that, Kayte. As we wrap up today, what is the main takeaway that you'd like member firms to remember from this conversation?

19:47 - 21:18
Kayte Toczylowski: FINRA has a really unique role as a self-regulatory organization. We are a membership organization. And sometimes I hear firms think of us just as a regulator. So, one of my main takeaways is if you remember nothing else from this podcast, remember we are not just the regulator. We are a membership organization. We are not just for compliance and legal issues. We want to understand what's happening in the industry, and how FINRA can be a resource for you. We want member firms to talk to us. We want member firms to work with us. It is only together that we can protect investors and keep our market safe. So, make sure that you're working with us.

And I also want to hit home that the committees I talked about, these different forums that we host, these conversations that we have with member firms, this is not exclusive. I want to make sure that all member firm listeners know that they have a seat at the table, that they can get involved, and you don't need to have a special role at your firm or to have a special contact at FINRA to get involved. We want to make sure we're hearing from you. Use the indication of interest form. Let us know that you want to get involved with us. We want to make sure we hear from you.

21:18 - 21:43
Margherita Beale: Great. Well, that's it for today's episode. Kayte, thank you so much for joining us and speaking on this important topic. Listeners, if you don't already, please be sure to subscribe to FINRA Unscripted wherever you listen to podcasts. All of the resources mentioned in today's episode will be included on the homepage for the episode. Today's episode was produced by me, Margherita Beale, and engineered by John Williams. Until next time.

21:43 - 22:22
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