Last week, the Financial Industry Regulatory Authority (FINRA) published its 2025 Annual Regulatory Oversight Report. The 80-page report hits on a number of familiar themes and subjects and includes two new areas of focus: 1) risks arising from the use of third-party vendors, including cybersecurity and data privacy risks, and 2) extended-hours trading services, which have become increasingly common across the industry. FINRA offers new observations regarding registered index-linked annuities (RILAs) in the context of Reg BI obligations. The report also reflects FINRA’s increased scrutiny of risks associated with emerging technologies, with a particular focus on generative artificial intelligence (AI) tools. Additionally, although much of the report repeats items included in prior years, it provides useful, comprehensive checklists reflecting FINRA’s views on the various topics and risk areas covered. Efforts to operationalize some of the items raised can present unique challenges, and we encourage you to reach out to a Sidley contact to talk further about particular concerns raised in the report.

(more…)