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[…]
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[…]
The FINRA journey of changes in ownership and control for a FINRA member firm is one that can be difficult to traverse without a proper guide.
The FINRA Continuation of Membership Application (“CMA”) process is covered under NASD Rule 1017. The rule provides that should a member firm wish to make any changes as detailed in Rule 1017(a), an application must be filed with FINRA. More specifically, these events include: a merger, an acquisition, an asset acquisition, a change in ownership or control or a material change in business operations as defined in NASD Rule 1011(k).