FINRA Eases Membership Process for Exchange Members

FINRA proposed rule amendments for broker-dealers to establish a short-form membership application process and partial fee waiver for certain firms applying for FINRA membership. The proposal follows recent SEC rule changes that require firms that trade only on exchanges to become members of FINRA.

As previously covered, the SEC final amendments to Exchange Act Rule 15b9-1 ("Exemption for certain exchange members") shrink the scope of the broker-dealer exemption for entities that only trade on exchanges by eliminating the "de minimis allowance" and the proprietary trading exclusion. As a result, FINRA proposed implementing a short-form membership application process. FINRA also proposed partially waiving the new membership application fee for broker-dealers that are (i) SEC-registered non-FINRA member firms applying for registration and (ii) members of a national securities exchange with which FINRA had a regulatory service agreement in the 12 months leading up to the SEC's action.