Wreck of Cards

A law of political physics is that a regulator will always find something new to justify its existence, whether or not it’s needed. Witness the plan by the Financial Industry Regulatory Authority (Finra) to gather account information each month from America’s roughly 4,000 brokerage firms. Known as the Comprehensive Automated Risk Data System (Cards), this experiment in big data is intended to allow “birds-eye view surveillance,” said Finra chief Richard Ketchum in May. “CARDS will allow us to collect and manage data from firms in such a way that we can quickly identify trends and product concentrations that are harmful to investors and take swift, responsive action.” Finra is the “self-regulatory organization” that polices the securities industry. Overseen by the Securities and Exchange Commission, it is considered a state actor by some judges but operates as a private, nonprofit organization of member firms. And those firms, especially small ones, are fretting about new compliance costs and privacy risks. More in the Wall Street Journal here.