Broker-Dealer Formation

FINRA Membership Application and State Registration for New or Changing Brokerage Firms

RND Resources Inc has vast broker industry experience from a business development strategy standpoint as well as compliance and regulatory concerns. We’ve worked with firms over the years that were starting from scratch, adding new product lines, merging with another firm, or were recently purchased and need a fresh start. We understand compliance from the standpoint of your business model, compliance, and tax planning. Our team of CPA’s, MBA’s, and veteran FINRA consultants work with you to understand the complexities of your strategic goal. Then we’ll make recommendations and establish procedures based on the assessment of your needs. We handle new membership applications (NMA) and change membership applications (CMA).

  • Prepare documents, forms, and supporting schedules in preparation for the pre-membership interview process. Includes; form BD, forms U-4 and U-5, agreements with banks, clearing agents, or bureaus.
  • Prepare regulatory manuals for compliance with FINRA regulations, supervisory procedures, operations, internal controls, anti-money laundering compliance program, branch offices, cyber-security / disaster recovery, business plan, business continuity plan, identity theft prevention program, accounting procedures, continuing education programs, and many other items.
  • Provide Financial and Operations Principal (FinOp) registration and service under our series 27
  • Provide Chief Compliance Officer (CCO) Principal registration and service under our series 24
  • Additional Principal Registrations available: 
    • Series 4 – Registered Options  Principal
    • Series 53 – Municipal Securities Principal
  • Assistance establishing SIPC membership, registration in the Lost and Stolen Securities program, and Fidelity Bonding requirements.
  • Multi-state registration service | SEC Registration
  • Ongoing support plans for regulatory compliance, consulting, audit, tax planning, and accounting.

Changing Membership Applications

FINRA Rule 1017 specifies a broker-dealer must file a CMA (Change of Membership Application) in the case of a:

  • Merger
  • Acquisition
  • Asset transfer (transfer of over 25% of revenue generating assets)
  • Change of ownership or control
  • Material change in business operations

A material change in operations may include (not an exhaustive list); Removing or modifying a business restriction; Adding a new market, business line, underwriting service, or acting as a dealer for the first time; Adding a business that requires a higher net capital requirement.

Rules for when a firm should file and when a firm may not need to file a CMA are complex. Our suggestion is to err on the side of caution and consult with a qualified FINRA compliance consultant anytime there is a change in the business activities, staff, or procedures (preferably in advance if possible). As with New Member Applications (NMA’s), the Change Membership Application requires a substantial amount of paperwork.  In some cases a firm may qualify for changes without having to complete the CMA paperwork process. In other cases; once the application is submitted, more paperwork is requested by FINRA. RND Resources Inc is available to assist firms in transition and we’ll provide a quote based on hourly rates, fixed fee service, or monthly retainer services depending on your needs.

Firms filing FINRA NMA or CMA paperwork should be prepared for any number of follow up requests for more information and responses. The measure of follow up is something that often causes concern and frustration for firms that are starting out or eager to get started with new ventures. Be advised, the process in its entirety can take up to 180 days. RND Resources Inc has expertise in new and change membership applications and can typically reduce the estimated processing time significantly for clients, as well as avoid many common timely and costly mistakes.  Failure to follow up on requests and responses may result in a lapse of the application and subsequent rejection.

Consulting & Compliance services: Back office outsourcing; Web Focus filing; brokerage accounting, compliance and recordkeeping; Branch office and FINRA audits; Expert testimony and compliance monitoring; Cyber-Security Procedures.

BACK

“Dave’s company worked with my firm assisting compliance efforts in our broker dealer division. I would highly recommend his services.”

Bruce N. – August 2011