FINRA Proposes Streamlining Continuing Membership Applications

FINRA says it is proposing to cut out many of the administrative delays involved with applications for continuing membership.

Firms file continuing membership applications to reflect material changes in a firm’s business operations, such as ownership or control, according to a proposed rule change that FINRA has filed with the SEC. Currently, broker-dealers typically exchange letters with FINRA to initiate and continue the continuing membership application process, says Todd Cipperman, principal of Cipperman & Co., a law firm in Wayne, Penn.

The new process will be partially electronic, the proposal suggests, to eliminate current deficiencies and delays. Among other changes, certain fields will be pre-populated with information that a firm had previously submitted to FINRA on other occasions.

“The 1017 process is one that broker-dealers would like see fixed, and this is a good start,” Cipperman says. “There will still be some human element to the process, but at least broker-dealers will have a better idea upfront what they are looking for.” 

Donna Mitchell writes for Financial Planning.