In response to SEC amendments adopted on August 23, 2023, the Financial Industry Regulatory Authority (FINRA) has proposed a short-form membership application process. The SEC amendments made some changes, including removing the gross income exemption, which had previously allowed firms to trade with other broker-dealer firms for their own account. An SEC broker-dealer who wants to affect security transactions on places other than an exchange must be a FINRA member. The deadline for compliance is September 6, 2024.
There are some exceptions to the membership requirements. A broker-dealer does not have to join FINRA if it is already a member of a national securities exchange, does not have customer accounts, and its transactions are either in furtherance of Rule 611 regulations or only to execute the stock leg of stock-option orders.
FINRA’s proposal aims to make the application process faster so that firms can meet the September 6, 2024 deadline. In addition to hastening the process, it also includes a partial waiver of the new member application fee. The proposal would not apply to all firms. Firms must be a member of a national securities exchange with a regulatory service agreement with FINRA and be SEC-registered non-FINRA members who are applying due to these new amendments.
The proposal allows for a short-form expedited membership application. To accelerate the process, FINRA will waive the membership interview. The new member application fee would be one-half the standard fee. FINRA has a goal of processing applications within 100 days of receipt. FINRA is currently accepting applications — FINRA opened applications on November 6, 2023. While firms are not required to be FINRA members until September 2024, they must apply 120 days before the deadline.
Quadrant Regulatory Group has a team of membership application experts that will ensure your application is processed efficiently.