1017 Material Change Determination

1017 Material Change Determination

When a member intends to add a line of business, FINRA has shown that this type of expansion is often a significant event that impacts the firm’s supervisory and compliance infrastructure, personnel, and finances. When such an impact occurs, FINRA staff is required to verify that the member continues to meet each of the membership criteria identified in Rule 1014. However, FINRA recognizes that any proposed new business line’s characterization as a “material change in business operations” ultimately depends on assessing all relevant facts and circumstances. Certain proposed new business lines, such as market-making, underwriting, and acting as a dealer Read more about 1017 Material Change Determination[…]

1017 Change in Membership

1017 Change in Membership

The Firm should review areas of its business to determine if any current or future changes to the Firm’s business may warrant a change in membership application (a.k.a. “CMA” or “1017”). FINRA requires firms to file a continuing membership application (CMA) whenever they seek to expand their operations activities, and for other business events, as indicated in NASD Rule 1017(a) (Continuance in Membership Application or CMA). Firms also must file an application whenever they seek to modify or remove restrictions previously imposed in a membership agreement (a membership agreement change). Failure to comply with this requirement may provide a basis Read more about 1017 Change in Membership[…]

Exclusions from the Definition Investment Advisor

FINRA Continuing Membership Application (“CMA”)

When a broker-dealer implements a significant change in the strategies and activities of the business, FINRA requires firms to file a continuing membership application (“CMA”) to modify its membership agreement. Through this requirement, FINRA seeks to help protect investors by ensuring that firms reflect these changes in their policies, procedures, and supervisory and compliance systems.

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