RE: Request for Comment on Regulatory Notice 25-05
Dear Ms. Mitchell,
As an owner of a Registered Investment Advisory (RIA) firm having registered representatives at a member firm that is independent and not affiliated in any manner with my RIA firm, I strongly object to the newly proposed Rule 3290 in Regulatory Notice 25-05.
Our RIA firm is in the middle of its third SEC audit and the original exam request letter included hundreds of items which required us to respond with hundreds of thousands of documents and records. Just responding to the requests took hundreds of hours from all staff. Plus, three auditors have spent countless hours reviewing our responses both on-site and off-site. After several months, we are still in audit mode.
This proposed Rule would subject certain independent RIA/IAs to an additional layer of corporate and regulatory oversight that doesn’t exist for other RIA/IAs that do not have FINRA licensure. Further, the proposed Rule claims jurisdiction over real estate, banking and insurance business, where FINRA has no right to regulate under its Charter or are otherwise subject to regulation by other Federal and/or State(s) agencies.
I have read the Comment Letter submitted by Mr. Purcell of PKS Investments, and I fully agree with his stated arguments against promulgating the proposed Rule 3290. It will be impossible to comply with client privacy mandates, and his citation of voluminous conflicting rules and guidance presages greater regulatory confusion and turmoil should Rule 3290 be adopted.
Registered Investment Advisory firms already are regulated by the SEC and the States and are not subject to FINRA jurisdiction. We are fiduciaries and subject to those standards. Imposition of FINRA Rules, that are in no way related to our business, on only those RIA firms that have person(s) also registered with a FINRA member creates an uneven regulatory environment and serves no purpose other than an unwarranted expansion of FINRA’s jurisdiction.
I strongly believe that the proposed Rule 3290 as currently written together with the guidance and analysis provided within Regulatory notice 25-05, should not be adopted. I respectfully ask that FINRA reconsider the proposed Rule as originally drafted and discussed in Regulatory Notice 18-08.
Based on these considerations, I believe that proposed Rule 3290 as proposed in Regulatory Notice 25-05 should not be adopted.
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Dina L. Fliss Comment On Regulatory Notice 25-05
Monday, May 12, 2025
Ms. Jennifer Piorko Mitchell
Office of the Corporate Secretary FINRA
1735 K Street
Washington, DC 20006
RE: Request for Comment on Regulatory Notice 25-05
Dear Ms. Mitchell,
As an owner of a Registered Investment Advisory (RIA) firm having registered representatives at a member firm that is independent and not affiliated in any manner with my RIA firm, I strongly object to the newly proposed Rule 3290 in Regulatory Notice 25-05.
Our RIA firm is in the middle of its third SEC audit and the original exam request letter included hundreds of items which required us to respond with hundreds of thousands of documents and records. Just responding to the requests took hundreds of hours from all staff. Plus, three auditors have spent countless hours reviewing our responses both on-site and off-site. After several months, we are still in audit mode.
This proposed Rule would subject certain independent RIA/IAs to an additional layer of corporate and regulatory oversight that doesn’t exist for other RIA/IAs that do not have FINRA licensure. Further, the proposed Rule claims jurisdiction over real estate, banking and insurance business, where FINRA has no right to regulate under its Charter or are otherwise subject to regulation by other Federal and/or State(s) agencies.
I have read the Comment Letter submitted by Mr. Purcell of PKS Investments, and I fully agree with his stated arguments against promulgating the proposed Rule 3290. It will be impossible to comply with client privacy mandates, and his citation of voluminous conflicting rules and guidance presages greater regulatory confusion and turmoil should Rule 3290 be adopted.
Registered Investment Advisory firms already are regulated by the SEC and the States and are not subject to FINRA jurisdiction. We are fiduciaries and subject to those standards. Imposition of FINRA Rules, that are in no way related to our business, on only those RIA firms that have person(s) also registered with a FINRA member creates an uneven regulatory environment and serves no purpose other than an unwarranted expansion of FINRA’s jurisdiction.
I strongly believe that the proposed Rule 3290 as currently written together with the guidance and analysis provided within Regulatory notice 25-05, should not be adopted. I respectfully ask that FINRA reconsider the proposed Rule as originally drafted and discussed in Regulatory Notice 18-08.
Based on these considerations, I believe that proposed Rule 3290 as proposed in Regulatory Notice 25-05 should not be adopted.
Thank you for your consideration.
Sincerely,
Dina L. Fliss