Broker Dealer Registration

The New Membership Application Process
Understanding the New Membership Application process is critical when deciding whether to start a new FINRA Broker Dealer. Broker Dealers undergoing the broker dealer registration process will have to be mindful of regulations and application requirements on the Federal level with the SEC, State level according to state-by-state regulations, and Self Regulatory Organizations (SROs) such as FINRA.

Form the Legal Entity and Reserve a Name
ACI works with our clients to consult them on the type of legal entity that is best suited for the business they are intending to conduct and can work with them to complete the filing(s) to form the legal entity. Consulting might include considerations based on tax liabilities and exemptions and potential restrictions or advantages from a management perspective. The types of Legal Entities for consideration include a Corporation, a limited liability company, a limited partnership or a sole proprietorship.

Develop a Business Plan
ACI works with our New Membership Application clients to develop a comprehensive business plan the first time around before submitting an application to FINRA. By anticipating the types of questions that FINRA will ask and bringing knowledge from other successful New Membership Applications, ACI is able to consult the prospective broker dealer on areas including:

  • The legal name and entity type as well as operating locations
  • Ownership Structure (direct and indirect) and Organizational Chart
  • Nature of business such as products and services offered
  • Description of target clients and marketing plan
  • How to present biographical information of the management team including experience, qualifications, education, etc.
  • Description of facilities (eg. Floor plan), communications systems, and operational plans
  • Explanation of how the firm will be capitalized initially and forecast of income/expenses for 1 year


Demonstrate firm meets the FINRA 14 Standards of Membership
1. New Member Application, business plan, and supporting documents are complete and accurate
2. Firm and individual licenses and registrations
3. Applicants and associated persons capable of complying with securities laws
4. Relationships stated in business plan are properly documented/established and comply with securities laws
5. Facilities are sufficient for business and will accommodate business operations for first year
6. Communications are adequate and account for business continuity
7. Ability to meet net capital requirements (SEC Rule 15c3-1)
8. Financial controls are in place to meet federal securities laws and FINRA Rules
9. Adequate compliance, supervisory, operational, and internal controls in place
10. Drafted Supervisory Controls System (WSPs, operating procedures, compliance procedures)
11. Record keeping system in place, overseen by qualified staff
12. Training needs assessment conducted and training plan created/written
13. No information indicating applicant may circumvent, evade, or avoid compliance
14. Application and all supporting documents are consistent with securities laws and regulations

FINRA Application Review Timeline
When estimating the time it will take to be doing business the client should consider not only the time to form the legal entity, develop the business plan and management structure, and complete the application and supplemental documents, but also the review period after the substantially complete application is submitted. FINRA maintains 180 days (6 months) from the time of submission of a substantially complete application to review the New Membership Application. 30 Days after receiving the application FINRA will respond with questions or request additional documents and the client will have 60 Days maximum to respond to FINRA's initial questions and provide requested documents, and 30 Days maximum to respond to additional questions and document requests after the initial request. Once all questions are adequately answered and no new questions are asked FINRA will contact the firm for a Pre-Membership Interview, usually at the district office, with notification at least 7 days prior for a final review of the principal(s)' experience and business plan.  FINRA may approve the application with or without restrictions.


For more information on completing a new membership application with the assistance of ACI, contact info@acisecure.com.





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