For Firms

Submitting a membership application with FINRA is a considerable undertaking. Working for an existing member firm might be the best course of action rather than undertaking the new membership process. Costs are another consideration. The FINRA New Member Application fee is $3,000 for introducing firms and $5,000 for clearing firms. The applicant must also submit registration fees for the states in which it will conduct business, as well as all licensing and registration fees for each associated person.

If you are satisfied that the best course of action is to become a FINRA-regulated member firm, the following additional steps must be completed:

1. Submit Entitlement Applications
   All FINRA new membership applicants must submit a hard copy entitlement application in order to be permitted to electronically submit applications such as the 107-page Form NMA to the FINRA's Gateway.
   
   Entitlement agreements may be obtained at: FINRA
   
   They must then be mailed to:
   FINRA
   Registration and Disclosure Department
   9509 Key West Avenue
   Rockville, Maryland 20850
   
   Some of the hard-copy documents that must be submitted to the same location include:
   • The appropriate Entitlement Forms
   • Entitlement Agreement
   • CRD and Regulation Filing
   • Member Firm Email Notification Contact Form
   • Assessment Report
   • Notarized Form BD
2. File Form BD
   Applicants must file Form BD to register with the SEC, SROs (including FINRA), and jurisdictions through Web CRD. A hard-copy Form BD should be submitted to FINRA, along with the Entitlement forms as mentioned above in the Entitlement Applications section. The initial Form BD must bear an original signature and must be notarized.
   
   A firm is under a continuing obligation to update changes to information required on Form BD by filing an amendment electronically with Web CRD.
3. Submit Form NMA
   The Form NMA is very detailed and must be substantially completed or it will be deemed "not filed." The main sections of the form include:
   • Section I. General Information
   • Section II. Business Lines
   • Section III. Personnel
   • Section IV. Net Capital and Sources of Funding
   • Section V. Contractual and Business Arrangements
   • Section VI. Policies and Procedures
   • Section VII. Facilities
   • Section VIII. Record keeping
4. Secure Funding
   The applicant must fund its CRD Account. Applicants are required to fund, via electronic funds transfer, the general account from which the application, examination, state, and other registration fees will be drawn. Initial payment of the application fee and funding for the applicant's CRD account may not be made by hard-copy checks.
   
   The FINRA New Member Application fee is $3,000 for introducing firms and $5,000 for clearing firms. In addition to the FINRA New Member Application fee, the applicant must also submit registration fees for the states in which it will conduct business, as well as all costs associated with qualification exams, SRO registration fees and fingerprint fees for each associated person.
5. Meet Standards for Admission
   All applicants must satisfy the following uniform standards for admission to become a member firm:
   • Anti-Money Laundering (AML) Requirements-The PATRIOT Act and Rule 3011
   • Proof of Experience
   • Net Capital Requirements-SEC Rules 15c3-1 and 17a-11
   • Financial Controls are in place
   • Audit Trail Requirements
   • Reporting Requirements for Clearing Firms
   • Communications and operational systems adequacy
   • Established clearing and other arrangements
   • Supervisory system is in place
   • Continuing education needs have been assessed
6. Submit Firm Name
   Applicants are required to submit proposed broker-dealer names to FINRA's Registration and Disclosure Department for review to determine any conflicts with existing member names and compliance with federal law. FINRA will deny use of unacceptable names. Names such as "US Federal Securities" or "Guaranteed State Securities" would not be acceptable.
7. Complete SEC Registration
   FINRA will automatically notify the SEC of the membership application approval. Registration with the SEC will then be complete so long as the applicant checked the SEC box on the application.
8. Complete State Registration
   Nearly all state government securities agencies use the Web CRD system for processing the initial Form BD and broker-dealer fees. If the applicant checks the state(s) with which the firm intends to register on the Form BD, FINRA automatically notifies the state(s) of the applicant's membership application. However, many states require additional documentation.
9. Complete SIPC Registration
   All broker / dealers registered with the SEC must become members of the Securities Investor Protection Corporation (SIPC). Exempted from the SIPC requirement are applicants who exclusively sell Mutual Fund shares, Variable Annuities, insurance and government securities, or furnish investment advice to investment companies or insurance companies. Broker / dealers may request SIPC membership materials when registration with FINRA becomes effective.
   
   Generally, each member firm must also belong to SIPC, a company which provides protection to investors of failed broker-dealers. The firms are required to pay an annual assessment based on their revenues.
   
   SIPC information is available from:
   Membership Department
   805 15th Street, NW, Suite 800
   Washington, DC 20005
   (202) 371-8300
10. Complete the Securities Information Center Registration
    The SEC requires all applicants to register as inquirers in the Securities Information Center's Lost and Stolen Securities Program. Forms and information about the program are available at:
    
    Securities Information Center
    Operations Manager
    P.O. Box 55151
    Boston, MA 02205-5151
    (617) 345-4910
    
    
11. Take Note of the Timeframe Requirements
    FINRA staff is required to process the application within 180 calendar days from the date of its receipt of a substantially complete application for membership. Under NASD Rule 1012, applicants filing for new membership with FINRA have 60 calendar days to respond to FINRA District Office staff's initial request for information and must respond within 30 calendar days of any subsequent requests. If these deadlines are not met, the application will lapse and the applicant must start the process anew.
12. Understand Membership Agreement Specifics
    Finally, FINRA membership is granted upon receipt of a written Membership Agreement which embodies a contract between the new member and FINRA.
    
    By far, most agreements have restrictions placed on the members. "Restrictions" is a term simply meaning the exact lines of business that the firm may engage in. Additional lines of business may be added later by filing a request pursuant to Rule 1017.