On Oct. 31, FINRA proposed to update member application process.
FINRA proposed to establish a short-form membership application process and partial waiver of new member application fee for firms that must become FINRA members.
Follows SEC Aug. 2023 amendment to SEA Rule 15b9-1 re membership, see #144635.
Proposed Rule
Would adopt FINRA Interpretive Material IM-1013-3 that would set forth a short-form membership application process for certain firms that apply for FINRA membership.
The short-form application would be available to firms that apply for FINRA membership due to amendments to Exchange Act Rule 15b9-1, adopted in Aug. 2023.
Proposed IM-1013-3 would provide that if firm’s application for FINRA membership seeks to materially expand, change operations, must apply for new membership.
New membership application would be subjected to full application, interview process.
Also would amend FINRA Interpretive Material IM-Section 4(e) of FINRA bylaws in order to provide a partial waiver of the new membership application fee to those firms.
Proposed IM-Section 4(e) would assess 50% applicable membership application fee.
Eligibility
Amended process, waiver available only to SEC-registered non-FINRA member firms that apply for FINRA membership due to Rule 15b9-1 17 CFR 240.15b9-1 amendment.
Those firms must have been a member of a national securities exchange with which FINRA had regulatory service agreement (RSA) for past 12 months from Aug. 23, 2023
Planned Effectiveness
The rule will take effect immediately upon SEC approval.
Nov. 3, 2023 SEC Approval
On Nov. 3, 2023, SEC approved membership process proposal with immediate effect.
Nov. 9, 2023 FINRA Approval Notice
On Nov. 9, 2023, FINRA published regulatory notice to inform members of final rule.
Reported an effective date of Oct. 30, 2023, and a compliance date of Sep. 6, 2024.
Also on Nov. 9, SEC published approval of membership process in federal register.
