Subordination Agreements

Generally, brokers and dealers use subordinated loans and notes collateralized by securities (referred to as subordinations) to borrow funds or securities from investors to increase their regulatory net capital. Pursuant to FINRA Rule 4110(e)(1), subordinations must be approved by FINRA in order to receive beneficial regulatory capital treatment. See Regulatory Notices for more information, including details of FINRA's requirements for proposed subordinations:

Standard FINRA Subordination Agreement Templates

How to Submit Subordinated Loans Related Requests

FINRA has implemented a platform to submit Subordinated Loan related requests electronically through the Firm Gateway. Effective November 30, 2015, all firms are required to file all subordinated loan requests using this platform. For more details, please see Regulatory Notice 15-42 and Subordination Agreements Submissions page.

Please contact the following individuals for any questions related to Subordination agreements:

  • Diana Hernandez, Principal Subordinated Loan Examiner at (646) 315-8476 or by email.
  • Sheryl Martinez, Examination Manager at (212) 858-4135 or by email.