New Delhi, May 20 -- Brokerage firms facing scrutiny over a potential compliance violation have long been able to help their cause by engaging with regulators throughout the process. Now Finra, the brokerage industry's self-regulatory organization, is piloting a new self-reporting initiative that could bring Finra's inquiries to an end sooner and potentially avoid penalties.

Leaders of Finra's enforcement division described reforms to the organization's processes at a recent conference in Washington, stressing the importance of volunteering information that could help regulators understand more about the firm's operations, what might have gone wrong from a compliance perspective, and what the firm is doing to address the issue.

At the o...