FINRA Advances Rule Modernization Initiative

Features

• FINRA Advances Rule Modernization Initiative
  FINRA has reached some significant milestones in our rule modernization initiative, completing several priority rule changes while maintaining momentum on additional rule modifications, FINRA Chief Legal Officer Robert Colby announced in a March 2 blog.

  Since Colby’s last update in September 2025, we have raised the gift limit from $100 to $300 per person annually, modified requirements for capital acquisition brokers to promote capital formation, and addressed the use of negative consent in bulk transfers of customer accounts. We have also filed proposed rule changes with the SEC on performance projections, corporate financing, outside activities, and intraday margin requirements. "Revising financial rules so they remain targeted and effective is rarely a straightaway," Colby wrote. "It involves research, engagement, drafting, and re-drafting, all with a dose of humility."

  Colby also previewed upcoming areas of focus. This week, FINRA's Board will consider proposals to address qualification exam waiting periods, electronic delivery of information requests, order allocation procedures, arbitrator selection, and security reconciliation requirements. Other priorities previously approved by the Board include protecting seniors and vulnerable adults from fraud, easing electronic delivery requirements, and addressing treatment of collective trust funds under new issue rules.

  To help stakeholders track progress, FINRA published its firstQuarterly Regulatory Policy Agenda and encourages engagement through comment letters, advisory committees, or direct conversations with staff. Anon-demand webinar explaining the notice-and-comment process is also now available.

• FINRA Requests Comment on Modernizing FINRA Arbitration Rules
  FINRA published Reg. Notice 26-06 on March 2 seeking comment on key areas of concern relating to its arbitration forum, intended to ensure the forum is fair and efficient for all users. This notice opens for all the opportunity to comment on a number of specific issues raised by those who have commented previously in response to the FINRA Forward rule modernization initiative, including forum selection, punitive damages, motions to dismiss, as well as arbitrator qualifications and training. Many of these issues have been discussed in connection with the forum for years and would benefit from additional input regarding modern practices and how the forum works today for participants. To comment, please refer to the notice, which includes submission instructions using an online form, email, or mail. Comments are due to FINRA by May 1.
   
• Gift Limit Increase Goes Into Effect March 30
  FINRA has adopted amendments to the FINRA Gifts Rule (Rule 3220) to increase the gift limit from $100 to $300 per person per year. In addition to raising the gift limit, the rule change clarifies that the FINRA Gifts Rule does not apply to gifts to individual retail customers. It also addresses valuation, aggregation, supervision, and recordkeeping requirements; and codifies several exceptions, including for personal gifts, bereavement gifts, items of de minimis value, promotional or commemorative items, and donations due to federally declared major disasters. The rule change goes into effect March 30 and modernizes the FINRA Gifts Rule by increasing the gift limit, while codifying existing guidance in a manner that will promote efficiency without reducing protection for investors.
   
• FINRA Adopts Temporary Exception for Qualifying Overnight Transaction Reporting
  As previously announced, beginning on March 30, the operating hours of the trade reporting facilities (TRFs) for NMS stocks will begin at 4 a.m. Eastern Time (ET) each business day rather than 8 a.m. ET. On February 25, FINRA filed a rule change with the SEC to adopt a limited, temporary exception for reporting qualifying overnight transactions prior to 8 a.m. ET. Under the exception, a “qualifying overnight transaction” is a trade appended with the .W modifier and that either results from an overnight batch process or involves a trade for exchange-traded fund shares based on a net asset value that is published while the TRFs are closed. The temporary exception will go into effect on March 30, to coincide with the extended TRF operating hours, and will expire upon the earlier of any further extension of the TRF operating hours, or Dec. 31, 2027.
   
• New Podcast: How FINRA Is Streamlining Data Requests
  In the latest episode of the FINRA Unscripted podcast, we delve into how FINRA is leveraging advanced data analytics and technology to help data collection become more effective and efficient, which reduces compliance burdens while maintaining robust market oversight and investor protection.
   
• Dispute Resolution Portal Mobile App Now Available for Arbitrators
  FINRA recently launched the new Dispute Resolution (DR) Portal mobile app, bringing case management directly to arbitrators’ mobile devices. The app features quick sign-in and provides arbitrators with access to their case documents, messages, mobile alerts for important deadlines, scheduling tools, Zoom integration, and expense reporting capabilities. Search “DR Portal” in the Apple Store and Google Play Store to download.
   
• ICYMI: A New Resource on FINRA Priorities
  FINRA published its first Quarterly Regulatory Policy Agenda, which outlines our current priorities for significant regulatory policy initiatives. The agenda covers a range of priorities, including arbitration reforms, electronic delivery, senior investor protection, and extended hours trading. It also provides information on active rule filings pending with the SEC and rule changes approved by the SEC or filed for immediate effectiveness within the last 12 months. This agenda will be included in the “Resources” section of the Weekly Update moving forward.
   
• ICYMI: FINRA Adopts Amendments to Capital Acquisition Broker Rules
  FINRA adopted amendments to the Capital Acquisition Broker (CAB) rules that are designed to reduce the regulatory burden on CABs while maintaining CABs’ limited institutional business model and important investor protections. The amendments will go into effect on March 25. The amendments are part of our ongoing FINRA Forward efforts to promote capital formation without lessening investor protections. Key provisions include expanding the definition of institutional investor to include eligible employees; allowing CABs to act as intermediaries in secondary transactions of unregistered securities between institutional investors; permitting CABs to represent buyers as well as sellers in specified private placement and M&A transactions; and allowing CAB-associated persons to participate in private securities transactions, subject to FINRA Rule 3280. These changes, approved by the SEC on Feb. 10, the amendments may encourage more broker-dealers to elect CAB status, benefiting both firms and investors alike.
   
• ICYMI: FINRA Publishes Approach to Member Firm Risk Assessments, Business Model, and Business Segment Definitions
  As part of the FINRA Forward Initiative to empower member firm compliance, we published our risk framework and risk assessment methodology to provide greater transparency into risk assessment processes. Business model and business segment definitions were also published to clarify how FINRA classifies firms, particularly as we plan to share business model- and business segment-specific resources in the future.

• FINRA publishes disciplinary actions to remind members of specific conduct that violates FINRA rules and may result in disciplinary action. The February 2026 Monthly Disciplinary Actions are available here.