FINRA Adopts Amendments to Streamline Capital Formation | FINRA.org

FINRA Adopts Amendments to Streamline Capital Formation

July 29, 2026

Features

  • FINRA Adopts Amendments to Streamline Capital Formation
    The SEC approved FINRA’s proposed changes to Rules 5110 (Corporate Financing Rule-Underwriting Terms and Arrangements) and 5123 (Private Placements of Securities) on July 24. The amendments clarify parts of Rule 5110 regulating underwriting compensation, including the valuation method for and exceptions from securities acquisitions that are considered underwriting compensation. They also expand the exemptions available in Rule 5123 to include offerings sold to accredited investors for certain family offices and certain entities with assets under management in excess of $5 million, consistent with the SEC‘s treatment of those categories. We will announce effective dates for the changes in a regulatory notice.

    These changes are part of our ongoing FINRA Forward efforts to ease costs and burdens associated with capital formation without lessening investor or issuer protection. They follow rule amendments to support growth among capital acquisition brokers and to expand access to IPOs for business development companies; a rule proposal to expand access to IPOs for collective trust funds; a modernized filing form for public offerings; and a new private placement information page on FINRA.org.
     
  • FINRA Requests Comment on Modernizing Best Execution Guidance FINRA is reviewing our best execution guidance to ensure that Rule 5310 remains effective in an evolving marketplace. We published Regulatory Notice 26-15 on July 24 to request comment on how we can modernize this guidance to facilitate investor protection and market integrity under the existing principles-based standard. The notice also asks firms where additional interpretive guidance would be most useful. Comments are due by Sept. 25.
     
  • Rule Change to Improve TRACE Price Transparency Adopted
    The SEC issued an order on July 24 approving FINRA‘s proposal to expand the existing non-member affiliate—principal transaction indicator in TRACE to also suppress certain member-to-member affiliate transactions from public dissemination. By preventing the dissemination of additional back-to-back inter-affiliate trades meeting certain criteria that provide no new pricing information, this rule change improves transparency in TRACE-eligible securities. FINRA will announce the effective date of the rule change in a regulatory notice.
     
  • CE Council Seeks Feedback on Firm Element Training Resources 
    The Council on Continuing Education—an industry advisory committee of broker-dealer and SRO representatives that provides advice and guidance on the securities industry CE programs—is conducting its 2026 Firm Element CE Survey, seeking anonymous input from compliance CE administrators on their firm element training programs, as well as their awareness and use of the CE Council website and its resources. The survey will help the CE Council identify gaps in guidance materials and establish benchmarks for evaluating member firm CE programs. Members are encouraged to forward the survey to other CE compliance professionals in their networks. The deadline to complete the survey is 11:59 p.m. ET on Aug. 7. Questions can be directed to [email protected].
Regulatory Reminders
  • Rule 605 Designated Participant Authorization Form: FINRA launched an updated Rule 605 Designated Participant Authorization Form, enabling members to obtain unique reporter identification codes and provide hyperlinks to their Rule 605 execution quality reports. The new form is available through the FINRA Gateway in advance of amendments to Rule 605 of SEC Regulation NMS and the Rule 605 NMS Plan, effective Aug. 1. All members selecting FINRA as their Designated Participant must submit the new form.
     
  • SEC Requests Comment on Proposed Exemption for Collective Trust Funds: The SEC issued an order on July 9 to institute proceedings to determine whether to approve or disapprove FINRA’s amended proposal to exempt collective trust funds from IPO allocation rules. Comments on the proposal, as amended, are due to the SEC by Aug. 4 and rebuttal comments are due by Aug. 18.
     
  • Rule for Approval of Bulk Investment Adviser Orders: FINRA filed a proposal to eliminate the requirement that late allocations of bulk investment adviser orders be approved by a firm principal. The proposal recognizes the limited utility and operational challenges of obtaining principal approval in today’s automated environment while maintaining important investor protections. Comments are due to the SEC by Aug. 11.
     
  • FINRA Seeks Comment on Modernizing Communications Rule: FINRA published Regulatory Notice 26-14 on July 9 requesting comment on a proposal to modernize our rules related to communications with the public. Comments are due by Sept. 11.
     
  • FINRA Seeks Comment on Modernizing Best Execution Guidance: FINRA published Regulatory Notice 26-15 on July 24 to request comment on how we can modernize our best execution guidance to facilitate investor protection and market integrity under the existing principles-based standard. Comments are due by Sept. 25. Please see above feature for more details.
     
  • TRF Operating Hours: FINRA’s Trade Reporting Facilities (TRFs) will extend their operating hours. Starting Dec. 6, they will operate from 9 p.m. ET on Sundays through 8 p.m. ET on Fridays, with a one-hour technical pause from 8 p.m. to 9 p.m. ET, Mondays through Thursdays, excluding holidays.
     
  • TRACE Transition to Native FIX: FINRA is transitioning from our legacy FIX Protocol platform to a new Native FIX platform for TRACE trade reporting. We anticipate retiring all TRACE legacy FIX reporting late in the fourth quarter.

Disciplinary Actions

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

Member Firm Hub – The latest guidance, resources, educational opportunities and more.

FINRA Forward – An overview of our work in action for becoming more effective and efficient at pursuing our mission is available on FINRA.org. The webpages include information and videos about our efforts to modernize our rules, empower member firm compliance, and combat cyber and fraud threats.

Quarterly Regulatory Policy Agenda – An overview of our current priorities for significant regulatory policy initiatives.

Comment Process – On-demand webinar on how to provide comments on FINRA Forward proposals, as well as the impact of comment letters and how they are used. 

Involvement and Election Process – How to engage with FINRA to help carry out our mission of protecting investors and safeguarding market integrity. Members can contribute their unique perspectives and skillsets with rotating terms on FINRA committees and other opportunities. Submit an indication of interest to be considered to join a FINRA advisory committee or speak at a FINRA event by clicking here.

Membership Application Program (MAP) Tools – Guidance and other resources to help current members prepare for their continuing membership application (CMA) and new applicants prepare for a new member application (NMA).

FINRA Unscripted – A monthly podcast that discusses a range of topics important to the securities industry.

Investor Insights – Feature articles on timely topics for investors, which firms are welcome to share with customers.

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