Message to FINRA Member Firms From Lou Denton, Chairman, SFAB - 11/15/07

November 15, 2007

Dear FINRA Member,

As you may be aware, the Small Firm Advisory Board (SFAB) election will take place in January 2008. This is the first time that firms will have the opportunity to elect representatives to serve on the SFAB.

By way of background, in 2006, FINRA CEO Mary Schapiro appointed the SFAB Restructuring Task Force, which I chaired, to review how the SFAB is structured and the way we bring members onto our Board. During this review, small firms asked the task force to consider electing members to the SFAB to promote broad industry involvement. The Task Force embraced this recommendation, and the result is the upcoming election. So, as Chairman of both the SFAB and the task force that recommended these changes to FINRA, I encourage you to participate in the process.

The SFAB plays an important role for small firms, most notably by providing guidance to FINRA staff on the potential impact of proposed regulatory initiatives. If you're interested in becoming involved, I encourage you to consider running. Five seats on the SFAB are up for election, and eligible candidates who wish to have their names added to the ballot must submit a candidate profile form to FINRA's Corporate Secretary by November 30. This form and details about candidate eligibility are available in the Election Notice.

Last month, FINRA firms elected seven industry members to the FINRA Board of Governors, including three from small firms. These three will also serve as at-large members of the SFAB, and will provide the FINRA Board with valuable input regarding the small firm perspective during FINRA Board discussions.

I'd also like to briefly mention two new initiatives introduced in October that the SFAB had the opportunity to review and comment on during the development process: the Small Firm Emergency Partner Program and the Firm Gateway. FINRA worked with the North American Securities Administrators Association (NASAA) and an industry working group to develop the partner program—a new voluntary emergency planning initiative aimed at helping small firms in times of crisis. This non-mandatory program is designed to help two similar but geographically separated firms that use the same clearing firm establish a supportive partnership. In the event of a disaster, the affected firm's customer accounts will be temporarily supported by the partner firm. FINRA and NASAA developed a template that firms and their common clearing firm can use to establish a partnership. If you'd like to learn more or participate in this program, visit or contact your firm's liaison.

Also in October, FINRA introduced the Firm Gateway—a new online tool that provides consolidated access to FINRA regulatory and filing applications. The Firm Gateway displays filing reminders and upcoming rule changes to help firms meet regulatory deadlines, and makes it easier for users to move between applications. More information about this initiative is available at

If you have any questions or need additional information about these or other matters, please contact any SFAB member. Our telephone numbers are listed on FINRA's Web site. You may also call me at (610) 238-0888.


Lou Denton
Chairman, FINRA Small Firm Advisory Board