The Financial Industry Regulatory Authority is undertaking a “broad review to modernise” its rules and is reaching out to the almost 3,300 broker-dealers that it oversees for feedback, according to a notice posted on Wednesday.

Finra said the missive represents “a first step” toward potential changes, which could ultimately affect a wide swath of firms’ supervisory obligations. Finra’s review will initially focus on two areas: “capital formation and the modern workplace,” including remote supervision and recordkeeping. Firms, investors and other “interested parties”  have until May 12 to submit comments, according to the notice.

“Finra believes that modernizing requirements and removing unnecessary burdens to reflect how the securities industry operates today—or could operate in the future—benefits both firms and investors,” according to the notice.

Finra invited comments on which rules could be a focus based on their “economic costs and benefit,” what changes would “facilitate innovation” for firms and whether there are gaps or challenges where firms could benefit from additional guidance or standards. Finra also said it is looking to focus on whether its oversight results in “unnecessary or duplicative burdens” with other agencies.

The notice appears to reflect a rising push for deregulation ushered in by President Donald Trump, said Brad Bennett, who served as Finra’s head of enforcement for almost six years until 2016. “They’ve been jumping on the deregulation train,” Bennett said, noting that Finra undertook a similar listening tour during the first Trump administration that ultimately led to a slowdown in enforcement.

Finra’s push also follows political shifts at the Trump administration’s Securities and Exchange Commission where new rules have been put in place, including requiring senior approvals for investigations, noted Emmet Ong, a partner in Brian Cave Leighton Paisner. Finra is also facing legal challengesfrom broker-dealers that have questioned its constitutionality, said Ong, who co-authored a blog post forecasting that the SEC changes would trickle down to the industry self-regulator that it oversees.

“It may be that FINRA is feeling the weight of the political discussions and legal rulings that call into question its existence as a private regulatory body,” Ong wrote in an email.

A Finra spokesperson said that the notice “is in line with FINRA’s commitment to continuous improvement.” The spokesperson declined to comment further about the notice’s details, implications and impetus.

Finra has been taking other steps that fit within the broader political context.

Following Trump’s election in November, Finra scrubbed its website of its prior promotions of racial justice and diversity, equity and inclusion, according to a Bloomberg report. This month, it dismantled its diversity advisory committee, which it had established in 2022 to enhance DEI efforts, according to a Citywire report.

Finra, which last year finalized new rules for supervising remote-working brokers, recently sent out a memo requiring staff to return to in-office work at least two days a week, according to Bennett and another lawyer close to Finra staffers. The memo follows a White House mandate for a full return-to-office among federal workers

Finra is “continuing to evolve our policy to ensure we maintain the benefits of consistent in-person engagement and flexible work arrangements,” the spokesperson said without confirming or denying if a two-day-a-week-in-the-office policy had been set.

Although Finra’s notice was in the vein of deregulation, investor advocates and other former enforcement officials who represent firms expressed optimism that their voices would be heard.

Jacob Frenkel, a former enforcement lawyer for the Securities and Exchange Commission who now represents investors, brokers and firms, said the initiative is “long overdue.”

“This is refreshing – opening a dialogue to be responsive rather than entirely imposing,” said Frenkel, who is chair of the Government Investigations and Securities Enforcement practice at Dickinson & Wright in Washington, D.C. “Regulators often are playing catch-up with respect to market developments, needs and products,” he added.

Investor advocates plan to suggest pro-investor reforms including the need for greater protection against third-party scams and mandatory insurance for broker-dealers, according to Adam Gana, a partner in the law firm Gana Weinstein and president of the Public Investors Advocate Bar Association.

Still, lawyers said the impact would likely be far-reaching. In 2016, when Trump moved into the White House for the first time and Robert Cook became Finra’s chief executive. Cook made what he labeled “a listening tour” traveling nationwide to seek the views of the regulatory organization’s member firms and other stakeholders.

By March 2017, Finra launched a self-evaluation and organizational improvement initiative, called FINRA360, which downplayed formal enforcement investigations and emphasized voluntary compliance. Enforcement action “is not the right tool in all cases,” Susan Schroeder, who was head of FINRA enforcement, said in 2018.

Since 2016, Finra’s enforcement actions have most years declined in number and have consistently led to small total fines. It imposed $87 million in penalties last year, or a 14% dip from the $101 million in 2023, according to a recent analysis by the law firm Eversheds Sutherland.

Prior to President Trump’s election, Finra had faced criticism that it had not been aggressive enough and that it had been focused on small-ticket violations.