Membership Application

This section is designed to guide you through the process of preparing and submitting Form NMA. Once you have prepared and submitted the required Forms U4 and BR, you may begin to prepare Form NMA and its attachments for submission. Information is provided here on how to prepare, the types of documents you'll need to gather, how to access the Form NMA, components and features of the Form, process dependencies and how to avoid some frequent pitfalls.

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.

• How to Prepare
• Accessing Form NMA
• Completing Form NMA
• Reviewing and Submitting Form NMA
• Filing Dependencies and Timing
• Common Pitfalls and Mistakes

How to Prepare

Before starting to prepare Form NMA, you should do the following:

• Print a blank Form NMA. You will use this as a guide to assist you in identifying and gathering the information and documents necessary for completion of the electronic Form NMA. A blank Form NMA may be obtained by accessing the Form NMA in accordance with the Accessing the Form NMA instructions below and printing the form once you've selected the Begin a New Form feature.
  
  
• Review the blank Form NMA, noting in particular those questions that might require you to obtain additional details about the Applicant that you do not currently have. Gather that information before starting to complete the electronic Form NMA.   
  
  
• Identify the attachments that will be necessary, as indicated in the Form. You should gather these documents electronically and save them in a place where you can easily access and attach the needed documents as you complete the Form NMA. As you will see, the blank Form NMA identifies the attachments required at specified sections within the Form.

If your business model is unusual or does not appear to fit within any of the activities identified, consider contacting a Member Management Liaison located in the District in which the Applicant proposes to have its main office. Contact information for the Member Management Liaison is located in the left hand navigation panel.

Be sure to allow sufficient time for preparation before commencing electronic Form NMA.  This will allow you to complete the electronic Form NMA efficiently, with fewer interruptions to locate and include the required information and supporting documents.

Accessing Form NMA

To access Form NMA, select the Form NMA link under the Forms section in the left navigational panel of this page. Select the Begin a New Form icon and begin completing the Form. A few tips:

Saving Drafts: Note that the Form NMA may be saved in draft form, and subsequently revised prior to submission. 

 

Prompt Completion Encouraged: Applicants are strongly encouraged to complete the Form NMA as promptly as possible and not save the draft Form NMA for indefinite periods. This is because, in the event of a version or other change to the Form NMA, it may become necessary to start completion of a new Form NMA.   

Completing Form NMA

Form NMA is a standardized form with eight major sections, each of which captures information and documentation concerning the Applicant's proposed business. A brief introduction to each of these sections is provided below.

Section I. General Information. This section requires information on the Applicant's business plan, proposed business activities, securities clearance and settlement arrangements, and business development. It provides the general framework for the remaining sections of Form NMA. While this section of the Form should be completed first, the remaining sections of Form NMA may be completed in any sequence.

 

Section II. Business Lines. This section consists of separate subsections detailing all business activities identified in page 5 of the Form BD, as well as other additional business lines not separately enumerated, such as operating alternative trading systems, securities lending and prime brokerage services. Since the required subsections in Section II are presented for completion based on the business activities selected in the Form BD and Section I of Form NMA, Applicants must ensure that all proposed business lines are identified in Section I.

 

Section III. Personnel. In this section the Applicant identifies its proposed associated persons, specifically General Securities Principals the Financial and Operations Principal, and such other principals and personnel as are required for the proposed business. The information to be supplied for each associated person includes professional background and qualifications and proposed responsibilities with the Applicant.

 

Section IV. Net Capital and Sources of Funding. The Applicant is required to provide information concerning its net capital and supporting documentation for the origins of its funding. Additionally, information is required on expense-sharing arrangements and anticipated sources of future funding, should the need arise. A unique feature of this section is the required mapping of the sources of funding to facilitate tracing these funds from their points of origin to the Applicant. An explanatory chart is provided in Form NMA for your convenience.  

 

Section V. Contractual and Business Arrangements. Among the arrangements to be identified in this section are Fidelity Bond Coverage, service agreements, Accountant Designations and Audit Agreements.

 

Section VI. Policies and Procedures. This section is designed to capture a wide range of the policies and procedures to be implemented by the firm to conduct and supervise the proposed business in accordance with all applicable rules and regulations. These include Written Supervisory Procedures, Supervisory Control Policies and Procedures, Business Continuity Planning and Continuing Education.

 

Section VII. Facilities. In this section the Applicant identifies its main office, branch and non-branch locations and the designated Supervisor for each location. Information on the premises, including leases, shared premises and responsibility for expenses at the location are also required.

 

Section VIII. Recordkeeping. This section requires information on the recordkeeping system to be used by the Applicant, including information on storage media and recordkeeping services. Also required are samples of the books and records that the Applicant proposes to use in the conduct of its business. 

Reviewing and Submitting Form NMA

• Review Feature. Once you have completed the Form NMA, there is one major step before you submit. Form NMA is equipped with a special Review feature that checks the Form prior to submission to ensure that all required questions are answered and supporting documents attached.
  
  
• Missing Information. When required information or attachments are missing, the Review feature provides a detailed list of the section and question numbers, indicating whether a response and/or attachment are required. Use this list to revise Form NMA and provide the required information. Once you have done so, run the Review feature again to ensure that all missing items have been addressed.
  
  
• No Missing Information. When the Review feature does not identify any missing items, Form NMA is ready for submission. You submit the Form by selecting the "Submit" button on the Review page. Note that the "Submit" button is not available as long as the Review identifies any missing items.
  
  
• Confirmation of Submission. Once an Applicant has completed and successfully submitted the electronic Form NMA and all required attachments, the electronic filing system (EFS) will generate a Confirmation Page that will provide the address of where to submit the membership application fee and those items that cannot be submitted electronically.

Filing Dependencies and Timing

• Before Form NMA is Filed: Before you begin completing Form NMA, you must first complete the following registrations:
• • Form U4 - Uniform Application for Securities Industry Registration or Transfer. This form must be filed for the Applicant's proposed Principals and other associated persons identified at the time of application. Form NMA will retrieve from CRD the name and CRD number for those persons identified as associated with the Applicant. The Applicant will then be required to provide information including their background, qualifications, and proposed responsibilities. Note that while additional persons may be presented after filing Form NMA the Applicant will be required to amend Form NMA to include them and then resubmit Form NMA.
    
    
  • Form BR - Uniform Branch Office Registration Form. This form is used to register the firm's main office and branch locations. The Facilities section of Form NMA will retrieve the reported information for these locations and require the applicant to provide additional information on the management and business to be conducted at each location. Hence, prior Form BR submission is required for proper completion of Form NMA. 
    
    
  • Form BD - Uniform Application for Broker Dealer Registration. Information from Form BD will be retrieved by Form NMA. Importantly, this includes the business lines from page 5 of Form BD which drive the corresponding pages of Business Lines in Form NMA that the Applicant will be required to complete. Therefore, the Applicant should ensure that Form BD is accurate.
    
    
• Filing Form NMA: Once these forms have been submitted, complete and submit Form NMA and supporting documentation. As a reminder: Form NMA retrieves and displays certain key information from the Form BD, BR and U4 for the Applicant. Entries to these forms are updated overnight and become available to Form NMA the following day. Be sure to allow sufficient time for these updates to occur. 
  
  
• After Form NMA is Filed: Not later than ten calendar days after the electronic Form NMA is filed, the following documents must be submitted via first class mail, overnight courier, or hand delivery:
  
• • Fingerprint cards
    
    
• Once FINRA confirms that the application fee has been received, the following will take place:
• • Substantially Complete Review: Staff will determine whether the new membership application is substantially complete.
  • • Application Not Substantially Complete: If the application is deemed not to be substantially complete, the application will be rejected and the application fee will be returned less a $350 processing fee. See NASD Notice to Members 07-20 and NASD Rule 1013(a)(3) for further information.
      
      
    • Application is Substantially Complete: If the application is deemed to be substantially complete the formal application review will commence.
      
      
  • Requests for Additional Information: Within 30 days, staff will request any additional information required. This may include requests for clarification concerning the proposed business, additional supporting documentation and other information.
    
    
  • Applicant Responses: The Applicant has 60 days to respond to the initial request for information, and 30 days to respond to any subsequent requests. Other response due dates may be established as agreed upon between the FINRA staff and the Applicant.
    
    
  • Membership Interview: Membership interviews are required for all new member applicants. Applicants will be notified in writing of the date, time and location of the interview; the personnel required to attend; and any information or documentation to be brought to the interview. Depending on the facts and circumstances of the Applicant, FINRA staff may or may not require additional information subsequent to the interview. [See the "Interview" Tab for additional details on the membership interview.]
    
    
  • Decision: Once the review process is complete, a written decision will be issued granting membership, granting membership with restrictions, or denying membership. [See the "Decision" Tab for additional details.]
    
    
  • Membership Agreement: Other than a denial, the decision will be accompanied by a Membership Agreement, which must be executed and returned by the Applicant.
    
    
  • Membership Effective: Other than a denial, the firm will be notified of its effective date of membership and will be provided access to the Member Interface.

Common Pitfalls/Mistakes

The more complete and accurate the application and its attachments, the better situated both FINRA and the Applicant will be to navigate the application review process. The table below lists some common pitfalls and mistakes and how to avoid them.