Public concerns about privacy have prompted Finra to scrap plans to collect the names, addresses and tax IDs of brokerage account holders to help with regulatory enforcement.

Finra announced the change in its CARDS proposal in an update that was immediately praised by opponents of the controversial idea.

“While we still have concerns with data security, costs and other unintended consequences of the proposal, we applaud Finra’s response to industry concerns,” Dale Brown, president and CEO of the Financial Services Institute (FSI), said in a press release today. “We will continue to work with them as this proposal is considered.”

FSI, an organization of broker-dealers, has joined industry and investor groups opposing the plan on the grounds that it is a violation of privacy.

Finra announced last year that its Comprehensive Automated Risk Data System, or CARDS, would be designed to download customer trade data from clearing firms. The plans call for the data to be used to mine for churning, pump-and-dump schemes, excessive markups and mutual fund switching.

In addition to the privacy concerns, opponents also raised questions about how secure the personal information would be under the CARDS system and whether Finra was overstepping its authority.

The regulatory organization has been taking public comments on the proposal since announcing the plan in December.

In its recent update, Finra noted the public and industry concerns about privacy led to its decision to drop the name-collecting component.

“After considering the written comments on the CARDS concept proposal and the views expressed in Finra staff's discussions with industry participants regarding investor privacy, Finra has concluded that the CARDS proposal will not require the submission of information that would identify … the individual account owner, particularly, account name, account address or tax identification number,” the update said.

Finra officials could not be reached for comment.

The update noted that Finra will continue to take comments on the rest of the CARDS proposal until March 21.