FINRA Issues New Guidance on the Use of Negative Consent for Bulk Account Transfers

The Financial Industry Regulatory Authority (FINRA) has issued Regulatory Notice 26-03, providing updated guidance on the use of negative consent for the bulk transfer or assignment of customer accounts. The notice, published on February 6, 2026 is part of FINRA’s “FINRA Forward” initiative, which focuses on modernizing regulatory requirements while supporting member firm compliance.

This new guidance reflects feedback FINRA has received from member firms regarding the need to align regulatory practices with modern business operations, particularly in situations involving large-scale account transitions.

Overview of Regulatory Notice 26-03

Regulatory Notice 26-03 is intended to reduce regulatory burdens and clarify expectations around when and how firms may use negative consent in connection with bulk transfers or assignments of customer accounts. But what is negative consent? 

Negative consent generally allows firms to proceed with an account transfer if a customer does not object within a specified timeframe after receiving appropriate notice. Essentially, a customer not saying “no” equals a “yes.”

FINRA’s updated guidance consolidates prior interpretations and outlines effective practices to help firms apply negative consent in a manner that protects investors while improving operational efficiency for the firms.

Key Changes Effective April 1

A central update in Regulatory Notice 26-03 is that effective April 1, where appropriate under the circumstances, FINRA member firms may use negative consent letters without first obtaining FINRA staff’s “no objection.”

Previously, firms often sought explicit staff approval before proceeding with transfers by negative consent. Under the new guidance, FINRA is providing firms with greater flexibility, provided the use of negative consent is reasonable and consistent with investor protection principles.

This change is intended to empower firms to manage qualifying bulk account transfers more efficiently while maintaining appropriate supervisory controls.

Reinforcing Prior Guidance and Establishing Effective Practices

In addition to introducing procedural flexibility, the notice:

• Reiterates FINRA’s prior guidance regarding the use of negative consent
• Clarifies when negative consent may be appropriate in bulk transfer or assignment scenarios
• Outlines effective practices firms should consider when planning future transfers

These practices are designed to support informed customer decision-making, ensure transparency, and help firms maintain compliance with applicable FINRA rules and supervisory expectations.

What This Means for Member Firms

While Regulatory Notice 26-03 reduces certain procedural hurdles, it does not eliminate a firm’s responsibility to evaluate whether negative consent is appropriate under the specific facts and circumstances of a proposed transfer. In other words, the firm is still held accountable for irresponsibly using negative consent when it would be inappropriate.

Firms should continue to assess customer impact, disclosure quality, and supervisory oversight when relying on negative consent.

As with all regulatory updates, firms may need to review internal policies, written supervisory procedures, and operational workflows to ensure alignment with FINRA’s clarified expectations.

Staying Aligned With FINRA’s Modernization Efforts

At Quadrant Regulatory Group, we monitor regulatory developments like this consistently in order to help firms understand changes, assess their impact, and adapt their compliance programs accordingly.