In December, the Financial Industry Regulatory Authority, which oversees how investments are sold, proposed what it calls Cards, an electronic system that would regularly collect data on balances and transactions in brokerage accounts.

If adopted, Cards would revolutionize how regulators do their jobs and could make it harder for unscrupulous brokers to bilk customers.

But some critics think it could endanger the privacy and security of investors’ confidential data. And the proposal ups the ante for Finra, which often has been criticized for letting wrongdoers slip through the cracks.

Under Cards (which stands for Comprehensive Automated Risk Data System), Finra would collect—probably weekly—a record of activity at all of the more than 4,100 brokerage firms nationwide.

Finra would scour the data continuously, looking for any hints that a firm or a broker might be taking advantage of a client: excessive trading or commissions, switching from one mutual fund to another, overcharging for bond E*TradeETFC +0.04%s, overconcentrating in risky or illiquid securities, and so on.

Cards “would provide us with a treasure trove of information and the ability to focus quicker on firms that are placing investors at high risk,” Richard Ketchum, Finra’s chairman and chief executive, said in an interview.

Social Security numbers and other personal details won’t be included in Cards, so Finra won’t be able to identify which investor an account belongs to or to match any investor’s holdings across firms. Nor will the data give anyone access to cash or securities.

Finra relies now partly on data analysis and partly on field examiners who gather information piecemeal on potential wrongdoing. With Cards, an ocean of detail would flow into Finra’s computers automatically.

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