Good morning. The Financial Industry Regulatory Authority may be facing its biggest existential crisis yet under the second Trump administration.

Wall Street’s self-regulatory arm has faced criticism before. But this time, Finra is a target of the conservative policy agenda of Project 2025 and some Republican lawmakers, and may face questions from the new U.S. Securities and Exchange Commission chair.

• Finra’s response: Despite criticism, Finra remains focused on protecting investors and leveling the playing field for industry participants while finding ways to do its job better, said Nathaniel Stankard, an executive vice president and chief of staff at the organization.
   
• Incoming threats: One policy recommendation in Project 2025, a 900-plus-page policy blueprint by the Heritage Foundation, advocates abolishing Finra and other self-regulatory organizations, including the Public Company Accounting Oversight Board. Project 2025 also recommends consolidating their regulatory functions into the SEC. Republican lawmakers are implementing some of these proposals, advancing legislation last week to eliminate the PCAOB and move its responsibilities to the SEC.
   
• What does it means? Folding Finra into the SEC could be seen by companies as a signal to decrease compliance spending and headcounts, and could also potentially lead to an increase in fraud and manipulation by broker-dealers, said Alma Angotti, a senior managing director at FTI Consulting. 

U.S. to overhaul curbs on AI chip exports after industry backlash.

The Trump administration plans to overhaul controversial regulations that would limit how many artificial-intelligence chips individual countries can buy, giving companies such as Nvidia a potential reprieve from tight export controls.

The Commerce Department plans to replace the rule, which imposed caps on how many chips could go to countries such as India, Switzerland, Mexico and Israel, a spokeswoman said. “The Biden AI rule is overly complex, overly bureaucratic and would stymie American innovation,” she said.

Serious Fraud Office wants more whistleblowers to report in the U.K.

A senior official at the U.K.’s Serious Fraud Office said the agency wants to take better advantage of whistleblower reporting in its enforcement efforts.

Sara Chouraqui, head of fraud, bribery and corruption at the agency, said many whistleblowers who might come to the SFO with evidence of potential white-collar crimes are reporting elsewhere.

• The U.K.’s competition and consumer protection enforcer is looking at closer cooperation with the U.S., and potentially yielding to the U.S. and other countries’ agencies on matters having a global impact, a top official said.
   
• The U.S. Justice Department declined to prosecute Universities Space Research Association for export control violations committed by a former employee, after the company promptly self-disclosed the conduct and cooperated with investigators.
   
• Morgan Stanley said the Securities and Exchange Commission’s enforcement division closed its investigation into the company’s cash sweep practices and doesn’t intend to recommend an enforcement action against the firm, according to Barron’s. 

Fed warns of rising economic risks as it leaves rates steady.

The Federal Reserve warned that the economy faced growing risks of higher unemployment and higher inflation due to tariff increases when officials agreed to hold interest rates steady on Wednesday.

“If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” Fed Chair Jerome Powell said at a news conference.

• Why the Fed Isn’t Ready to Join Other Central Banks in Cutting Rates
• Bank of England Cuts Rates After Fed Stands Pat

U.S. and Chinese officials to meet for trade talks.

Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are traveling to Switzerland on Thursday to meet Beijing’s lead economic representative, potentially paving the way for broader trade talks.

China’s Foreign Ministry said He Lifeng, China’s vice premier and leader Xi Jinping’s economic czar, would visit Switzerland from May 9 to 12 and hold discussions with American officials. A ministry spokesman said Wednesday the U.S. requested the talks.

• Fentanyl Crisis Provided Opening for U.S.-China Trade Talks
• How Will Tariffs Dent Asia Growth? It’s Still Too Early to Tell, IMF Official Says

• A truce was reached where the Houthis agreed to halt attacks on vessels, but they vowed to continue attacks against Israel. 
   
• Ukraine and Russia stepped up strikes ahead of Moscow’s World War II commemorations on Friday, with Russia closing more than a dozen airports and canceling scores of flights amid a wave of drone attacks.
   
• India and Pakistan accused each other of drone attacks on military targets Thursday, turning up the heat in the confrontation between the two nuclear-armed states that has been simmering since a militant assault on tourists in Indian-administered Kashmir just over two weeks ago.
   
• U.S. Secretary of State Marco Rubio designated two major Haitian gangs—Viv Ansanm and Gran Grif—as foreign terrorist organizations and specially designated global terrorists.

• Warren Buffett plans to step down as Berkshire Hathaway CEO in December after more than half a century. Individual investors express sadness, viewing Buffett as a ‘finance dad’ and a source of inspiration.
   
• President Trump is expected to announce a framework of a trade deal with the U.K. on Thursday, the first in what the White House hopes is a series of trade agreements since it imposed tariffs against allies and adversaries.

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