Regulatory news
Five key takeaways from the 2026 FINRA Anuual Conference
Douglas Moffat
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Vice President, Americas
June 1, 2026
The eflow team was in Washington, D.C. in May to attend the FINRA Annual Conference. In addition to exhibiting, meeting with North American clients, and extending our network of contacts, we made sure to attend some of the keynote speeches taking place during the conference to understand what FINRA is doing to support firms, and what it is expecting from firms in return.
Three core principles of transparency, efficiency and collaboration underlined many of the discussions that took place at this year’s conference. In this article, we break down the nuances behind these themes and dig deeper into the regulatory talking points that defined the conference.
“We’re focusing on empowering member firm compliance. [...] Our member firms are the front lines of protecting their investors, and our job is to help make that easier."
In April 2025, the regulator introduced its “FINRA Forward” initiative – a project intended to evolve its approach to regulation by way of three key objectives:
A year on from the genesis of this project, the 2026 FINRA Annual Conference saw the regulator double down on these principles. Naturally, the overarching aim of FINRA is still to maintain market integrity; however, it believes that the way to do that is through the updating of outdated rules to better reflect current market structure, technology, and business models.
They believe that, by modernizing their rulebook and encouraging the adoption of dedicated regulatory technology, compliance functions will improve their efficiency and reduce operational friction, leading to improved market integrity overall.
On the point of reducing friction, a recurring theme across the conference was that of ‘efficiency.’ Perhaps keen to shake off the view of regulatory compliance as a burdensome, manual process, many panels looked to the increasing adoption of AI and regulatory automation as a means of simplifying compliance while retaining robust protection and oversight.
Historically, many firms have struggled to achieve a true “30,000-foot view” of what is happening across their surveillance programme. Several speeches highlighted that AI-assisted investigation is key to delivering a holistic view of trading activity, while also getting compliance teams closer to genuine risk and speeding up their investigations.
Internally, the regulator also renewed their commitment to automating their own manual processes – and this means that the same will be expected of member firms.
However, despite the general optimism around AI adoption, some concerns were still raised...
With the increase in AI adoption, there has been a corresponding push towards the need for improved transparency. Greater use of AI tools in a surveillance context has increased the risk of the so-called “black-box” approach – outsourcing decision-making and governance to an AI tool without the proper checks and balances needed to ensure its accuracy and applicability.
To avoid this, firms need to ensure they have processes in place to achieve full explainability as and when required. For example, if an investigation with the regulator is opened, firms need to be able to explain:
The ability of AI to enhance and speed up alert investigations is clear, but this doesn’t mean that it can be used without human oversight – to meet regulatory expectations, firms will need to leverage new AI technologies while retaining control over the governance process and decision making. Ultimately, the responsibility of compliance still lies with the people controlling the technology.
Dedicated tools such as Sandbox testing environments may aid firms on this front. By stress-testing parameter configurations and alert thresholds in a sterile environment, firms will be better prepared to demonstrate the real-world effectiveness of their controls should a regulatory investigation be instigated
The “Compliant Communication in the Digital Age” session drew attention to the ongoing challenge of off-channel communication surveillance. Marrying communications to relevant trading activity remains challenging to achieve, and while there has been some adoption of basic communication surveillance technology, many of these solutions don’t provide the necessary oversight required to fully satisfy regulatory requirements.
Basic communications surveillance that matches keywords is no longer regarded as sufficient. Modern communication patterns are increasingly complex, often taking place across multiple channels and using purposefully veiled or misleading language. A holistic eComms surveillance solution should be able to capture communications across multiple channels, analyze the sentiment behind these messages, and pair them with potentially suspicious trading activity.
While the regulator also mentioned the need for increased personal accountability, the reality is that technology adoption is an essential component of communications monitoring – humans simply can’t process and analyze the vast volumes of data that now need to be considered.
Another key area of regulatory focus discussed across the event was best execution. Rather than being treated as a standalone technical obligation, best execution was consistently framed through the lens of client outcomes - rather than simply following best execution policies blindly, firms must be able to use data to demonstrate that execution decisions align with the client’s best interests in practice.
This ties into the recurring theme of accountability and governance – firms must move beyond blindly implementing static policies, and instead be able to demonstrate ongoing, data-driven supervision and refinement of best execution processes. This includes actively testing routing logic, monitoring outcomes, and evidencing how decisions are reviewed and challenged.
Across the conference, FINRA made clear their intention to promote themselves a modern, forward-thinking regulator. Our key takeaway was that investor protection and market integrity remains at the heart of their strategy, but that offering guidance on how compliance teams can reduce operational friction, improve efficiency, and reduce their regulatory burden is also central to their approach.
Beyond this, however, it seems clear that the regulator also expects a level of agility and adaptability from their member firms. It’s no longer enough to tick a box and blindly implement a regulatory solution in the hope this will be enough to be compliant – firms must constantly stay on top of their regulatory obligations, monitor the efficacy of their processes and technology, while continuously evolving their strategy to ensure it is fit for purpose in this rapidly evolving financial landscape.
