Interview

The FINRA Membership Interview is an important mechanism through which the FINRA staff informs itself and the Applicant concerning the review of the application and is mandatory for all new member applicants. This section is designed to help you understand what the Interview is all about and to provide useful information to assist you in preparing for the Interview.

General Overview of the New Member Application Process       

Start Applicant prepares and submits original, notarized Form BD & Web CRD Entitlement Forms.

Orientation Applicant accesses and reviews Applicant Interface to understand NMA Process.

Registration Requirements Applicant prepares and submits Forms U4 and BR.

Membership Application Applicant prepares and submits Form NMA and any additional information required.

Interview Staff schedules and conducts interview.

Decision Staff issues decision on Application and Membership Agreement as appropriate.

This section provides information on the following topics. You may click on any link to skip directly to that topic.

• Purpose of the Membership Interview
• Scheduling for the Membership Interview
• How to Prepare for the Interview
• Attending the Interview
• Dependencies/Timing
• Common Pitfalls/Mistakes

Purpose of the Membership Interview

The Membership Interview provides important opportunities to both the FINRA staff and the Applicant, including:

• Enabling FINRA to discuss the application with the Applicant and gather additional information to assist in determining whether the Applicant meets the standards for admission to membership.
  
  
• Providing a forum for FINRA staff to present any open issues, problems, or concerns regarding the application.
  
  
• Providing the Applicant with the opportunity to ask questions about the process, FINRA Rules, or the regulation of a broker/dealer.
  
  
• Providing an environment in which the FINRA staff provides, to the Applicant, information received from sources other than the Applicant and upon which the District Office intends to base its decision. (Note: Where this type of information is received after the Membership Interview, FINRA will promptly provide it to the Applicant.) 

Scheduling the Membership Interview

FINRA staff will contact the Applicant's representative to determine a mutually agreeable time to hold the Interview and to identify required attendees and documentation. Once the date is agreed upon, FINRA staff will send the Applicant a written notice of the Interview, which will provide important information, including the items listed below.

• Date, time and location of the Interview: The Membership Interview is usually conducted in the District Office for the district in which the Applicant will have its principal place of business, unless FINRA and the Applicant otherwise agree on another location.
  
  
• Required attendees for the Applicant: The required attendees may include persons identified in: Schedules A and/or B on the Applicant's Form BD and on Form NMA; the Applicant's description of its management staff; and supervisory personnel listed in the Applicant's written supervisory, compliance, and other procedures.
  
  
• Additional information to be brought to the Interview: The Interview provides a good opportunity to collect additional information needed for processing the application, including:
  
• • Information and documentation subject to an outstanding request or deemed by the FINRA staff to be necessary to the Application.
    
    
  • Updated financials prepared as of a date within 45 days before the date of the Membership Interview.
    
    
  • Amended Written Supervisory Procedures, if necessary, and such other items that will further assist the FINRA staff in its review.

How to Prepare for the Interview

• Be Prepared to Discuss. To prepare for the Interview, the Applicant and its associated persons should come prepared to discuss, among other things:
  
• • Types of business, including consistency between Form NMA and Form BD
    
    
  • Ownership and control of the firm
    
    
  • Financials, including methods of capitalization and responsibilities for expenses
    
    
  • Supervisory system, including procedures, personnel, and outsourcing
    
    
  • Customers, including business development, growth in client base, and sales practices
    
    
  • Future plans, including expansions
    
    
  • Transaction processing, including the handling of funds and securities
    
    
  • Affiliates, including their roles, if any with the firm
    
    
  • Books and records, including preparation and retention
    
    
  • Proposed branch offices, including supervision, activities, and responsibilities
    
    
  • Events giving rise to a rebuttable presumption of denial pursuant to Rule 1014(b)
    
    
• Bring Requested Information and Documentation. In addition to being prepared to discuss the topics above, you must prepare and bring with you any information or documentation that has been identified by the FINRA staff as required to be delivered at the time of the Membership Interview.
  
  
• Allow Sufficient Time for the Interview. Be sure to allow sufficient time for the Interview. This is particularly important where substantial travel will be required for attendance at the Membership Interview.
  
  
• Allow Sufficient Time for Preparation. Be sure to allow sufficient time for preparation. You should pay particular attention to any potential issues and areas of focus indicated  in requests for information and/or other discussions with FINRA Staff, including questions seeking additional clarification. Note that depending on the facts and circumstances of your application, you may want to begin preparing for the Membership Interview in advance of receiving the formal written notice of the Interview, particularly where the proposed activities tend to be more complex. This is also true where the application includes one or more factors that create a rebuttable presumption of denial pursuant to Rule 1014(b). The more thorough the preparation, the better equipped you will be to complete the Membership Interview process efficiently.

Attending the Interview

The Membership Interview is attended by the key officers and principals of the applicant and other persons identified by the FINRA staff in the notice of the Interview. Attendees representing FINRA include the analyst to whom the review of the application has been assigned, FINRA managers, and staff to which the Applicant will be assigned if the application is approved.

During the Interview, you may expect the following to occur:

• Introduction of attending FINRA staff, Applicant representatives and associated persons
  
  
• Discussion of questions developed by the FINRA staff in its preparation for the Interview
  
  
• Focus on certain aspects of the Applicant's proposed business, including where there are concerns with respect to the standards for admission
  
  
• Impact of certain information shared on the Applicant's net capital requirements
  
  
• Emphasis on pertinent rules and regulations
  
  
• Requested modifications and clarifications (e.g., to Written Supervisory Procedures, Form BD, Form NMA, Form BR, and other documents as appropriate)
  
  
• Requests for additional information
  
  
• Explanation of the next steps in the application review process
  
  
• General conclusion of the Interview
  
  
• Execution of acknowledgement of the Interview having been conducted

Note that the associated persons identified in the notice of the Membership Interview are all required to attend the Interview. Failure to attend the Interview may provide grounds for the lapse of the application pursuant to Rule 1012.

Dependencies/Timing

• Before the Interview. As a general matter, the Membership Interview is scheduled after the FINRA staff has had an opportunity to review and preliminarily assess the application. While it is understandable that the Applicant will want to have the Interview conducted as soon as possible after the application has been filed, bear in mind that the FINRA staff must have conducted a thorough review of all pertinent information and documentation in order to ensure that the Membership Interview, when conducted, is as informative and comprehensive as possible for all participants.
  
  
• Requests after the Interview. Note that after the Interview, one or more of the following may occur prior to the issuance of a Decision on the application:
  
• • Request for additional information and/or documentation
    
    
  • Additional discussions with the Applicant and its representative
    
    
• Although the FINRA staff works to ensure that the Membership Interview occurs at an appropriate point in the application review process, the facts and circumstances of your application may dictate the need for additional information and documentation after the Interview is conducted.
  
  
• Decision after the Interview. Pursuant to Rule 1014, FINRA is required to issue a decision on the membership application within 30 days after the conclusion of the Membership Interview or after the filing of additional information or documents, whichever is later.

Common Pitfalls/Mistakes

To assist your preparation for the Membership Interview, the table below lists some common pitfalls and mistakes and how to avoid them.