The financial services industry's main lobbyist group is warning that a proposed FINRA data system could put sensitive client information at risk of exposure, and burden financial services firms with new costs.

As it's currently defined, the proposed comprehensive automated risk data system, better known as CARDS, would require clearing firms to regularly send information about clients' accounts, such as the type, investments involved and trading activities. This would enable FINRA to analyze brokerage data collected in CARDS in order to identify red flags, such as sales misconduct, and shift some work away from on-site examinations, according to the self-regulatory organization's documents and its website.

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