Finanical Adivsor IQ (May 8, 2017) - Finra’s Board of Governors is mulling the regulator’s next steps on recidivist brokers, unpaid arbitration awards and liquidity reporting requirements, according to the board’s agenda for its May 10 meeting.

The board will consider amendments to rules governing oversight of high-risk brokers and the companies that hire them as well as further guidance on supervision. The issue is top of the list on Finra’s 2017 exam priorities, and has attracted the attention of other securities regulators, including Secretary of the Commonwealth of Massachusetts William Galvin. In January, an executive at Finra’s examination unit said the regulator was targeting up to 200 rogue brokers. Part of the examination includes assessing the supervisory systems in place at their employers.

In December, Galvin’s office concluded only 6% of brokers with disciplinary records were being properly supervised.

In this week’s meeting, Finra will also consider amendments to rules governing arbitration award payouts by both broker-dealer firms and individual advisors, according to the agenda. Last year, the Public Investors Arbitration Bar Association conducted a study of 2013 payout trends which found that almost $1 out of every $4 awarded went unpaid. Because so many unpaid awards from 2013 were supposed to come from brokers or firms that were no longer in the industry, one solution floated in the past was Finra setting up a reserve fund, possibly by requiring advisors to pay a fee into it.

On that note, the board will also consider seeking comment on new liquidity reporting and other notification requirements on large firms, according to the agenda.