FINRA Adopts Short-Form Membership Application for Eligible Firms

FINRA adopted a short-form application process for SEC-registered non-FINRA member firms that must become FINRA members under recently amended rules.

The amendments to Exchange Act Rule 15b9-1 ("Exemption for certain exchange members") narrowed the scope of the broker-dealer exemption from FINRA membership for entities that only trade on exchanges by eliminating the "de minimis allowance" and the proprietary trading exclusion (see prior coverage). Eligible firms must have been a member of a national securities exchange with which FINRA has had a regulatory service agreement for the 12-month period prior to August 23, 2023.

FINRA also provided for a partial waiver for the new membership application fee for those firms that apply for FINRA membership through the short-form membership application process.

The rule changes became effective on October 30, 2023.