Two Principal Waiver Request
Firms applying for FINRA membership, with the exception of sole proprietorships, must have at least two registered principals and one Financial and Operations Principal (FinOp), according to the FINRA Rule 1010 Series. Applicant firms, however, may request a waiver or exemption from the two principal requirement in accordance with FINRA Rule 9610 if the firm will be conducting a very limited scope of business.
Any waiver request will be evaluated by the staff of FINRA’s Membership Application Program (MAP) based on the facts and circumstances of the application, and the Applicant will be informed, in writing, of the staff's determination. If a waiver is granted, the principal at the firm must be qualified as a FinOp.
Applicants sometimes fail to consider the need for a waiver at the outset of the membership process, which can result in considerable delay. Applicant firms should determine whether a waiver will be sought at the time the application is filed and submit the required paperwork early in the process.
How to Submit a Two Principal Waiver Request
If the New Member Application (Form NMA) has not yet been filed, note that you must indicate in “Section III – Personnel” that a waiver is being requested. You must also attach the rationale referenced below to the application. Firms are granted access to the standalone Two Principal Waiver Request form after the Form NMA has been approved. Firms should submit waiver requests through this “form.”
What to Include in a Two Principal Waiver Request
The waiver submission must include a detailed description and supporting documentation for the firm’s request. These items must explain why a waiver is being requested and provide evidence to indicate conclusively that only one person associated with the firm should be required to register as a principal. The waiver request must contain:
- the Applicant firm's name and address,
- the name of the person associated with the firm who will serve as the primary contact for the application,
- the rule from which the Applicant is seeking an exemption or waiver, and
- a detailed rationale of the grounds for granting the exemption or waiver.
Note that Rule 1210.01 provides that the two-principal requirement of Rule 1220(a)(2) may be waived "in situations that indicate conclusively that only one person associated with an Applicant for membership should be required to register as a principal."
Technical Guidance: Submitting the Two Principal Waiver Request
|Filing System/Location||Firm Gateway, Forms & Filings Tab, Membership Filing|
|Filing Name||Two Principal Waiver|
|Accepted File Formats||PDF or DOC preferred|
Note: The firm’s Super Account Administrator (SAA) will be entitled with the administrator “CMA” privilege once the Form NMA is approved. Filers must have this user privilege in order to access and submit the Two Principal Waiver filing.
Questions? Contact Us
- Technical Filing Support: Contact the FINRA Support Center at (800) 321-6273.
- FINRA Gateway Support: Inquiries can also be submitted through the Support feature in FINRA Gateway. The Support tool allows you to submit a ticket with information and documentation for an issue, then track progress from within the system. FINRA will route the ticket to the appropriate team for review.