The Financial Industry Regulatory Authority published a clarification on its proposed amendments to requirements governing broker-dealer associated persons’ outside activities, stressing that the proposal would streamline long-standing obligations and does not create any new reporting or approval requirements. The stated aim is to reduce reporting so firms can focus on investment-related outside activities that present higher risks to investors and firms. FINRA said the proposal expressly excludes personal activities such as personal investments in non-securities (including Bitcoin), personal securities transactions subject to or delineated in FINRA Rule 3210 (including mutual funds, variable annuities, 529 plans and securities held at another broker-dealer), and the purchase, sale, rental or lease of a main home, dwelling unit or vacation home. It also stated the proposal does not impose new obligations related to outside investment adviser activities, would eliminate obligations for such activities conducted on behalf of a member’s affiliate, and asks whether existing obligations for unaffiliated investment adviser activity should be reduced or eliminated. Comments on Regulatory Notice 25-05 are due by May 13, 2025.
Financial Industry Regulatory Authority 2025-05-05
Financial Industry Regulatory Authority clarifies proposed outside-activity rule would cut reporting burdens and exclude personal investments
The Financial Industry Regulatory Authority clarified its proposed amendments to broker-dealer associated persons’ outside activities, emphasizing that the changes streamline existing obligations without new reporting or approval requirements. The proposal focuses on higher-risk investment-related activities while excluding personal activities and certain securities transactions. It also considers reducing obligations for unaffiliated investment adviser activities.