Continuing Membership Application Resources
FINRA requires members to file a continuing membership application (CMA) whenever they effect changes in ownership, control, or business operations. Members also must file a CMA whenever they seek to modify or remove restrictions previously imposed in a membership agreement. The CMA process protects investors by ensuring that a member’s supervisory and compliance systems, policies, and procedures keep pace with such changes. Specific instances that require a firm to file a CMA include:
- Mergers;
- Acquisitions;
- Asset Transfers;
- Changes to Ownership or Control; and
- Material Changes to Business Operations.
When a member submits a CMA, FINRA reviews it to determine whether the member will continue to meet its regulatory obligations, through FINRA’s Standards of Admission, if the filing is approved. After FINRA’s assessment, the application is approved, approved with restrictions, or denied.
Guidance and Resources
FINRA’s Membership Application Program (MAP) Tools page provides guidance and resources for current and prospective FINRA members as they navigate the application process.
The guidance and resources explain the process of filing a CMA in more detail, including the information and documentation firms need to file in support of the CMA.
FINRA also encourages firms to consult with their Risk Monitoring Team when they are considering a change to their business, as the team can provide additional guidance on the CMA process.
Available MAP tools and resources include:
- Overview of Materiality Consultation Process
- Continuing Membership Guide
- Guidance on MAP Considerations for Member Firms Engaging in Succession Planning or Exiting the Broker-Dealer Securities Business
- Guidance for Governing Documents and Attestations to Evidence Ownership
- Guidance for Ownership Changes and Asset Transfers
- Guidance for Applications for an Expansion of Representatives
- Guidance for Alternative Trading Systems
- Guidance for Operational Readiness for Online Platforms and Mobile Applications
- Guidance for Digital Asset Applications
- Guidance for FinTech Applications
- Guidance for Funding Portals
- Guidance for Applications for Mergers and Acquisitions
- Guidance for Private Placements
Rules and Regulations
Firms planning a merger, acquisition or business expansion/transfer should be familiar with the following rules and regulations. This list is not comprehensive, as requirements may vary depending on each firm’s business. It is the responsibility of each firm to research all laws, rules and regulations that may be applicable to their particular business model.
Application for Approval of Change in Ownership, Control or Business Operations
Definitions: Material Change in Business Operations
Safe Harbor for Business Expansions: Lists certain types of expansions that are presumed not to be material and therefore do not require an application for FINRA approval.
Notices
Regulatory Notice 10-01 (January 2010)
Proposed Consolidated FINRA Rules Governing FINRA’s Membership Application Proceedings; Comment Period Expires: March 5, 2010
Notice to Members 06-56 (October 2006)
SEC Approves Amendments to the Safe Harbor for Business Expansions; Effective Date: November 3, 2006
Notice to Members 04-10 (February 2004)
SEC Approves Amendments to Membership Application and Continuation Rules (Rules 1011, 1014, and 1017)
Notice to Members 02-54 (August 2002)
NASD Requests Comment on Proposed Amendments to Rules 1014 and 1017; Comment Period Expires September 20, 2002
Notice to Members 00-73 (October 2000)
SEC Approves Amendments to NASD Membership Rules; Effective Date: November 15, 2000