We steer clients through the extensive, multistep process of applying for a FINRA membership, including preparing your application as well as ensuring you have completed all required qualifications and examinations for your business.
Our US Compliance team works with the Financial Industry Regulatory Authority (“FINRA”) and exchange regulated broker-dealers from launch to ongoing administration and support, providing high-quality registration services, FINRA Rule 3120/3130 and exchange annual reviews, market access reviews, anti-money laundering programs, Financial and Operations Principal (“FINOP”) services, and more.
Our Broker-Dealer Compliance Services
We ensure that your filing obligations are met on an ongoing basis. This includes, but is not limited to:
- annual and periodic supervisory reviews and testing,
- individual registration applications and termination filings,
- and designing and implementing policies and procedures that are designed to meet your initial and ongoing compliance requirements.
FINRA Examination Experience
Our team has extensive FINRA examination experience. We support your broker-dealer through various FINRA Exam inquiries such as cycle exams (e.g. sales practice cycle exam), trading and marketing making surveillance, sweep, or similar FINRA examination efforts. Our consultants have the extensive experience necessary to evaluate each broker-dealer’s unique and complex risk characteristics in order to create a comprehensive compliance program to ensure FINRA compliance.
Broker Dealer Registration FAQs
In the U.S., broker dealers must register with the SEC, at least one SRO (e.g., FINRA if you will have a customer business, or an exchange if you will be a proprietary only firm), and if applicable, any relevant states. Typical milestones in a broker dealer registration project include:
- Selecting a name and reserving it with FINRA.
- Gaining access to the FINRA system by appointing a Super Account Administrator.
- Submitting Form BD for SEC registration approval.
- Submitting FINRA Form NMA (or an Exchange membership application), which requires detailed information concerning the proposed business activities, written supervisory procedures, sample forms to be utilized, detailed biographies of executives and leadership, and detailed information about the how the Firm will be capitalized.
- Membership interview and/or exchange onboarding.
- Annual Reviews – FINRA and exchange rules generally require the CCO to review and author reports concerning the Firm’s compliance policies and procedures.
- Annual Certification – The Firm’s CEO must make an annual certification, pursuant to the CCO’s report, that the Firm has conducted a review of its business activities and has appropriate policies and procedures in place.
- Annual Audit – Broker dealers must have their financials audited by a PCAOB registered, independent auditor each year. The audit results must be filed with the Firm’s Designated Examining Authority and/or the SEC with 60 days of the Firm’s fiscal year end.
- Anti-Money Laundering – Each year the Firm must have its AML program reviewed by an independent reviewer.
- Training – Broker dealers must conduct an annual compliance meeting and provide relevant compliance training to its staff annually.
- Upon receipt of a complete Form BD, the SEC has 45 days to approve or deny an application.
- Upon receipt of a complete FINRA New Member Application, FINRA has 180 days to make a decision. Other SROs may have similar timing provisions in their respective rules.
- These timelines can vary depending on how thorough and detailed the initial application documents are. The fewer follow up questions the SEC/FINRA have, the faster it can move through an application.
- Uncertainty as to the businesses to be engaged in. FINRA expects fully fleshed out systems, plans and procedures.
- Uncertainty as to entity structure or management.
- Individuals who control a broker dealer, directly or indirectly, including by virtue of just ownership, must generally be registered. Controlling persons should expect to have to take at least 2-3 exams.
- Legal and tax counsel should be consulted for the proper entity types (e.g., LLC, LP, etc.) to suit the businesses needs.
- Underdeveloped platforms or technology. If a proposed broker dealer intends to rely on a platform, FINRA will expect that platform will be available for a demo.
- Uncertainty as to funding sources. FINRA expects the prospective BD to demonstrate it has the financial resources to support its business initially, to trace the source of its funds to their origin, and to identify where, if needed, additional funding will come from.