Elections and How they Work

SFAC and Regional Committee Elections

Small Firm Advisory Committee 
The Small Firm Advisory Committee (SFAC) ensures that issues of particular interest and concern to small firms are effectively communicated to and considered by FINRA staff the FINRA Board of Governors (Board). The SFAC generally reviews and comments on all new and amended FINRA rule proposals, and provides guidance to FINRA staff regarding the potential impact of proposed regulatory initiatives on FINRA's small firms.

The SFAC is comprised of 10 members, five at-large members appointed by FINRA's Board of Governors, and five members elected by the small firms - one member in each of the five FINRA regions. FINRA's three small firm representatives on Board serve as ex-officio, non-voting members of the SFAC.

To be eligible for the SFAC, a person must be a senior member of a small firm (firms employing no more than 150 registered representatives) whose primary place of business and whose firm has its main office in the region up for election. Senior members of firms include owners, chief executive officers, presidents, chief compliance officers, chief operating officers, the firm’s FINOP or individuals of comparable status. SFAC members serve three-year terms and may not serve more than two consecutive full terms.

Regional Committees
The Regional committees advise FINRA on industry trends of regulatory concern, provide input on the impact of FINRA’s regulatory programs and communicate high-level information regarding meeting discussions to their constituents. Additionally, committee members serve as panelists in FINRA disciplinary proceedings. The committees are organized into the following regions: West (Districts 1, 2 and 3); Midwest (Districts 4 and 8); South (Districts 5, 6 and 7); North (Districts 9 and 11); and New York (District 10).

To be eligible to run for a regional committee seat, a person must be associated with a FINRA member headquartered in the district they are seeking to represent on the Regional Committee and be registered in the capacity of a branch manager or principal or denoted as a corporate officer of the FINRA member. Regional Committee members serve three-year terms and may not serve more than two consecutive full terms.

SFAC & Regional Committee Election Period
The SFAC and Regional Committee election cycles typically proceed as follows:

• September: Election Notices are posted announcing the upcoming SFAC and Regional Committee vacancies, soliciting candidate nominations and describing the process for becoming candidates. The nomination period runs for 30 days in which interested individuals can self-nominate to try to become candidates; the Corporate Secretary will review the nominations to determine eligibility.
• October:Elections begin; ballots are mailed to firm eligible to vote in the election.
• November:Voting ends; terms for the election winners begin the following January.

National Adjudicatory Council (NAC)

The NAC is a FINRA committee that reviews all disciplinary decisions issued by FINRA hearing panels, and presides over disciplinary matters that have either been appealed to or called for review by the NAC. While a decision is on appeal or under NAC review, any sanction imposed by the hearing panel is not enforced against the firm or individual. The NAC may affirm, dismiss, modify or reverse any finding, or remand for further proceedings. The NAC also may affirm, modify, reverse, increase or reduce any sanction, or impose any other fitting sanction. Unless the FINRA Board decides to review the NAC's decision, the NAC's decision represents FINRA's final action and may be appealed to the Securities and Exchange Commission.

The NAC comprises 15 members—seven industry members and eight non-industry members. The seven industry members of the NAC include two at-large industry members and five members elected to the following seats: two small firm seats, one mid-size firm seat and two large firm seats. Of the eight non-industry NAC members, at least three are public members.

The NAC meets in person four times per year; in addition to attending the meetings, NAC members will also be requested to serve on appeals, which involves reading the record of the case and attending oral arguments, and to participate in several conference calls to handle NAC matters.

The NAC election cycle generally follows the timeline below:

• August/SeptemberAn Election Notice is published announcing the upcoming election and the FINRA nominee (if any) for the vacancy. The Notice also contains information on the petition process for any interested individuals who wish to become a candidate.
• October/November:After the 45-day petition period, another Election Notice is posted announcing the start of the election and listing the candidates running for the seat. Ballots are sent to executive representatives at firms eligible to vote in the election.
• December:The election winner is announced and will serve a single four-year term beginning in January (no NAC members may serve consecutive terms).

Board of Governor Elections

The Board is FINRA’s governing body and is responsible for overseeing management in the administration of FINRA’s affairs and the promotion of FINRA’s welfare, objectives and purposes.

FINRA’s Board comprises 22 members, with 10 seats designated for industry members, 11 seats designated for public members, and one seat reserved for FINRA’s Chief Executive Officer. Seven of the industry governors are elected: three small firm governors, one mid-size firm governor, and three large firm governors.

The Board election cycle generally follows the timeline below:

• May/June:The Board election kicks off with an Election Notice announcing the FINRA nominee(s) and the start of the petition period for eligible individuals to try to become candidates. The petition period runs for 45 days, after which the Corporate Secretary reviews all submitted petitions and certifies individuals as candidates who submitted enough valid petitions.
• July/August:Election begins; ballots are mailed to firms eligible to vote in the election.
• August/September:FINRA holds its Annual Meeting when the voting period concludes; terms begin for newly elected Board members.

Elected governors serve three-year terms and may not serve more than two consecutive full terms.