Prospective consulting clients often ask the question, “How quickly can I get my FINRA New Member Application approved?” And unfortunately, the answer always seems to be the same, “Well that depends.” And it really does depend.
Factors that Slow the FINRA New Member Application Process
A FINRA New Member Application, or NMA, is subject to a process that can be onerous and confusing, but the good news is that it has been streamlined over the last few years. What used to be a decentralized process that was subject to quite a bit of variation among offices, is now a centralized process in FINRA’s New York offices. And believe it or not, the reasons for delays often have more to do with the content and quality of the application than delays by FINRA. One of the most frequent reasons for a delay in the FINRA new member application process is that the applicant has submitted an incomplete or inaccurate application. Substantial delays can occur as a result of a failure to complete the required licensing examinations, submission of incomplete documentation or an inadequate business plan. Getting the application filed in good order is a critical part of the process. FINRA actually has the ability to reject and application as substantially incomplete because its rules provide that applications, when filed, should be substantially complete. This requirement places the burden almost entirely on the applicant to produce what FINRA wants to see. However, in practice, FINRA rarely rejects new member applications as substantially incomplete and in fact often helps applicants in areas where the application is deficient.
Other factors that may impact the time required to complete the FINRA new member application process include: 1) complexity of the business or ownership structure being proposed, 2) background of the proposed owners/principals, 3) experience of the proposed principals (FINRA Rules require one year of direct experience or two years of indirect experience), and 4) nature of client base. To the extent that the application is on the simpler side of these factors (e.g. limited business, experienced principals, no disclosure history and institutional or sophisticated clients), the process may be shorter. To the extent the application is on the more complex side of these factors, it may take a bit longer. Either way, having a consultant who is well versed in the FINRA new membership application process and requirements can significantly shorten the time period of your FINRA NMA. If you are interested, check out the rules applicable to a FINRA new member application.
FINRA NMA expert, Mitch Atkins, FINRA’s former Regional Director for the South Region, has extensive experience working with the FINRA new member application, or NMA process. Contact Mitch Atkins, Principal, FirstMark Regulatory Solutions for more information on how you can shorten your FINRA membership application process. 561-948-6511.