FINRA’s New Member Application (or “NMA”) process is often viewed as complex and time-consuming. And as a pra
ctical matter, that is generally the case. FINRA’s NMA rules as they currently exist were written with a presumption that the prospective broker-dealer must supply a complete and comprehensive application. The rules provide that FINRA may reject an application that is not substantially complete. A failure to meet the standards in NASD Rule 1014 may result in a denial of the application.
There are also very specific time limits that are spelled out in the Membership and Registration Rules. For example, the rules grant FINRA a period of 180 days from the date of the application filing to issue a decision on the application. There are also interim time periods in which certain actions must be taken. For example, FINRA has 60 days after the filing of an application to issue a decision if it does not request additional information. If it does request additional information, it must do so within 30 days of receipt of the application. And an applicant must respond to FINRA’s inquiries within 60 days of the initial request and within 30 days of any subsequent request. FINRA must issue a membership decision 30 days after the membership interview is conducted, or after additional information that has been requested is filed.
There are quite a few dates to be aware of in this process. And FINRA has the authority (under Rule 1012(b)) to lapse an application if an applicant: a) does not fully respond to its written requests (within 60 days for an initial request and 30 days for a subsequent request), b) does not appear at a membership interview, or c) does not timely return its membership agreement (within 25 days after service of the agreement).
An application that is subject to a FINRA lapse requires the applicant to completely re-file the application (along with the full membership application fee) if it desires to continue the process. For this reason, a lapse is a significant event that can be quite costly.
It is important that a prospective FINRA member seek the services of an experienced FINRA NMA expert for help with the membership application process. Mitch Atkins, FINRA’s former South Region Director, has extensive experience with FINRA new member applications, having previously overseen the membership application function at the regional level. If you have questions about a FINRA CMA or NMA, contact Mitch Atkins, Principal of FirstMark Regulatory Solutions at 561-948-6511.