Finra Membership Agreement

Finra Membership Agreement
December 9, 2020 No Comments Uncategorized admin

A10. In short, it depends on a number of factors, including the size of your business and whether your company is eligible to use the Safe Harbor for business expansion (see IM-1011-1), or whether your company has a membership agreement that does not include a restriction on the types of extensions allowed by the Safe Harbor. FINRA members must submit a CMA FORM if they attempt to modify or remove restrictions previously imposed in a membership agreement. It is assumed that some changes to the Safe Harbor provisions are not material and would not trigger a filing with the CMA. This section contains information on the types of membership decisions made by FINRA staff once the application review is complete, the timing of these decisions, and related considerations. FINRA requires companies to submit a Continuous Membership Application (CMA) if they wish to expand or implement new business opportunities. Companies must also submit an application if they attempt to modify or lift restrictions previously imposed in a membership contract (a change to the membership agreement). This process helps protect investors by ensuring that a company`s monitoring and compliance systems, policies and procedures keep pace with these changes. In accordance with Article 1014, a decision on an application for membership must be taken within 30 days of the conclusion of the accession interview or after the submission of additional information or documents, whichever is the later.

Overall, FINRA is required to make a written decision on the application within 180 days of the filing date of the application or such other date as FINRA and the applicant agree. FINRA did not recognize any new registration categories as a result of the transaction. Therefore, affiliates of pure NYSE member organizations are automatically registered with the finra only for those listing categories that the NASD and NYSE jointly recognized at the end of the transaction (for example. B, a General Securities Representative Series 7); provided, however, that upon approval of FINRA membership for each of these partners, the firm must submit an amended Form U4 specifying the appropriate FINRA registration category(ies) for that person. With respect to the mandatory membership requirement, Finra has implemented a waiver process to expedite the approval of membership applications from the approximately 86 NYSE member organizations that must now become FINRA members. This process is set out in NASD IM-1013-1, which was approved by the SEC on October 12, 2007.3 FINRA has also established new section 4(b)(1) and (e) of the IM in Appendix A of the Articles of Association, which waives the application fee for companies that become members of FINRA in accordance with NASD IM-1013-1. After reviewing the application, the membership interview, other information and documents provided by the applicant, the public interest and investor protection, FINRA staff issue a written decision on the application, commonly referred to as a “decision letter”. This decision letter indicates whether the application has been approved, approved with restrictions or rejected. This decision is based on whether the applicant meets the standards for admission to membership set out in Rule 1014 of the NASD. Decisions on the approval of the application subject to restrictions or the rejection of the application shall include the justification of the restriction(s) or rejection on the basis of the approval standards set out in Rule 1014. It should be noted that each GAC requires different supporting documentation specific to the facts and circumstances of that CMA, as each application for membership is unique.

FINRA has also added sections 4(b)(1) and 4(e) of the IM to Appendix A of the Bylaws. This provision provides that NYSE member organizations that become members of FINRA in accordance with the waiver procedure are not entitled to the fees set out in Section 4(b)(1) of Schedule A for the original Form U4 submitted by entities for the registration of a representative or principal associated with the member organization at the time of filing a company`s application for membership in FINRA. These companies will also not be assessed with the application fee in accordance with Section 4(e) of Appendix A.A11. A company may apply the safe harbor provisions of IM-1011-1 if it is authorized to do so. If a company or client of the Company has a disciplinary history (as that term is defined in IM-1011-1) within the last five years, or if the Company is subject to a restriction in its Membership Agreement, it cannot use the Safe Harbor. Note that the Safe Harbor provisions only apply to business expansions listed in the table above. Under NASD Rule 1015, the claimant may submit a written request for review of the decision to FINRA`s National Board of Arbitration (NAO) within 25 days of notification of the decision. FINRA decides, in accordance with the procedures of Rule 1017, whether all such applications are approved, rejected or approved with restrictions. For these applications, the main consideration is an applicant`s ability to continue to meet the membership standards contained in FINRA Rule 1014. Pursuant to Article 4(b)(1) and (e) of Exhibit A of the NSD Statutes, an entity applying for membership under such interpretive material shall not be set at a specific registration and application fee set out in Sections 4(b)(1) and (e) of Exhibit A of the NASD Bylaws. NASD IM-1013-1 establishes a waiver procedure for companies that are approved member organizations of the NYSE as of July 25, 2007: (1) are approved member organizations of the NYSE, or (2) have applied to join the NYSE and are subsequently admitted to the NYSE (collectively, the “ONLY-NYSE Member Organizations”), unless these companies were also members of the NASD as of July 30, 2007, the closing date of the transaction.

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