Tag: NASD Rule 1017

In our 1017 Change in Membership blog we discussed events that would be considered a change in membership that trigger the requirements of FINRA Rule 1017. In this blog we will go over some key areas that firms should cover when reviewing to see if they trigger the application requirements under Rule 1017. Part 1: Changes in Business Lines or Product Offerings The reviewer is to inspect the Firm’s current membership agreement and verify its approved business lines. The reviewer considers other present or future business lines not contained in its membership agreement. Firms are not to engage in any Read more about 1017 Change in Membership Review[…]

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[…]