116. Application for Approval of Change in Ownership, Control, or Business Operations
(a) All capital acquisition brokers and applicants for membership in FINRA as a capital acquisition broker are subject to NASD Rule 1017.
(b) An existing FINRA member that seeks to change its status to a capital acquisition broker and is already approved to engage in the activities of a capital acquisition broker, but which does not intend to change its existing ownership, control or business operations, must file a request to amend its membership agreement or obtain a membership agreement to provide that: (1) the member's activities will be limited to those permitted for capital acquisition brokers under Capital Acquisition Broker Rule 016(c); and (2) the member agrees to comply with the Capital Acquisition Broker Rules.
(c) Subject to paragraph (d) of this Rule, a capital acquisition broker that seeks to terminate its status as such and continue as a FINRA member must file an application for approval of a material change in business operations pursuant to NASD Rule 1017, and must amend its membership agreement to provide that the member agrees to comply with all FINRA Rules.
(d) If during the first year following an existing FINRA member's amendment to its membership agreement pursuant to paragraph (b) of this Rule, a capital acquisition broker seeks to terminate its status as such and continue as a FINRA member, the capital acquisition broker may notify FINRA of this change without having to file an application for approval of a material change in business operations pursuant to NASD Rule 1017. The capital acquisition broker must file a request to amend its membership agreement to provide that the member agrees to comply with all FINRA Rules, and execute an amended membership agreement that imposes the same limitations on the member's activities that existed prior to the member's change of status to a capital acquisition broker.
Adopted by SR-FINRA-2015-054 eff. April 14, 2017.
Selected Notice: 16-37.