(Reuters) - The Financial Industry Regulatory Authority (FINRA), Wall Street's industry-funded watchdog, said on Friday that Chairman and Chief Executive Richard Ketchum will retire in 2016.
FINRA did not name a replacement for Ketchum, 64, who has led the regulatory body since March 2009, when its former chief, Mary Schapiro, left to head the U.S. Securities and Exchange Commission. However, Ketchum expects FINRA's board to select a successor by next summer, he said in an interview.
Under Ketchum, FINRA brought in stricter penalties against securities brokerages and individual brokers who commit fraud.
After criticism that FINRA's penalties were too often financially insignificant for wrongdoers, FINRA increased the amounts of its fines by indexing them to the Consumer Price Index (CPI).
Ketchum will stay in charge until a date set by FINRA's board. He will leave feeling upbeat about the regulator's beefed up use of technology to monitor Wall Street and find problem brokers, he said.
Ketchum, who has been outspoken about his belief that Wall Street firms and brokers should put clients' interests ahead of their own, oversaw an expansion of FINRA's free BrokerCheck system, where investors can research brokers' credentials and disciplinary histories.
Brokers have argued against some of the changes, such as disciplinary infractions that are permanently visible to the public even when a broker leaves the profession.
Ketchum had also promoted FINRA as a possible self-regulatory organization for registered investment advisers, who are overseen by the SEC, but are examined far less frequently than brokers.
He formally backed off from the controversial idea in 2013, but continued to discuss the need for heightened oversight of investment advisers.
In May, Ketchum took aim at a U.S. Labor Department's plan to reduce conflicts with brokers who offer retirement account advice and said the SEC was best positioned to design such a standard.
Ketchum has also been credited with notching up FINRA's technology surveillance by hiring Steven Randich as chief information officer in March 2013.
Ketchum had worked with the SEC for 14 years until 1991, when he moved to the National Association of Securities Dealers, or NASD Inc. NASD and major portions of NYSE Regulation consolidated in 2007 to become FINRA.
Ties between the SEC and FINRA were strengthened with the hiring of long-term SEC lawyer Robert Colby as FINRA's chief legal officer and the appointment of Stephen Luparello as head of markets and trading.