SIE: Becoming A FINRA Member Firm

Becoming a FINRA Member Firm

The Exchange Act requires every broker-dealer to be registered with a national securities association (unless it is a member of a securities exchange). At the present time, FINRA is the only such association.

It takes two steps to become a FINRA member firm. First, one must register with the SEC as a broker-dealer. The SEC has 45 days in which to respond, by either granting the registration or instituting proceedings to determine whether the registration should be denied. In practice, the SEC will grant the registration only after FINRA has approved the application for FINRA membership.

The second step