ACI assists broker dealers with obtaining FINRA approval on a regular basis. We have acted in this capacity for dozens of New Member Applications in recent years.
The Financial Industry Regulatory Authority (FINRA) is a Self Regulatory Organization (SRO) that governs the activities of broker dealer member firms. In order to receive any form of transaction based compensation related to securities, it is a requirement to apply for and be granted membership. The form required is known as the New Membership Application (Form NMA). Form NMA includes many components, inclusive of the corporate business plan, organizational structure, qualifications of principals and various financial reports, both current and projected.
While attorneys or compliance consulting firms are typically engaged to compile and submit Form NMA, it is a requirement for any applying member to designate a Financial and Operations Principal (FinOp) as part of the application submission. The designated FinOp will hold this title post-approval and FINRA requires this individual to have sufficient experience to provide them with comfort regarding the ongoing financial reporting of the firm. During the application process, FINRA will require certain items from the FinOp, including a biography, a pro-forma budget and current financial statements, including the computation of net capital.
FINRA’s requirements for capitalization may vary based upon the budget provided and the time it takes to be granted approval may deviate depending on the qualifications of all regulatory principals, including the FinOp. It is important for applying firms to associate with a candidate that will maximize their likelihood of approval and ensure there is no delay in being permitted to conduct business.
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