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.

Requests & Interview Staff makes and the Applicant responds to requests for additional information, as needed. Staff schedules and conducts an interview with the Applicant. 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:

• Review the blank Form NMA, identifying and gathering the information and documents necessary for completion of the electronic Form NMA. In reviewing the blank Form NMA, note 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. (Note: A blank Form NMA may be obtained and printed 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.).
   
• Identify the attachments that will be necessary, either as indicated as required in the Form or relevant to providing a complete understanding of the Applicant's business, structure and procedures. 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 or requested 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 the Membership Application Program ("MAP") Group by calling 212-858-4000 and selecting option 5.

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 for using Form NMA:

Saving Drafts: 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 organized to capture information and documentation based on the first twelve standards of NASD Rule 1014.  The Form is designed to leverage, where possible, certain information provided by the Applicant to FINRA through means other than the Form itself, in particular, information submitted via the Central Registration Depository (CRD®).  In instances where information from other sources are leveraged, if any such information presented to the Applicant in the Form is inaccurate, an Applicant must update the source system before ultimately submitting or amending the Form NMA.  (Typically it takes one business day after updating the source system for the Form NMA to reflect such changes.)

A brief overview of the Standards that make up the framework of the Form, including questions and documentation that FINRA is likely to consider when evaluating NMA's is provided below.

Standard 1: (Overview of the Applicant): This standard seeks certain applicant overview information such as details of the proposed business activities, supervisors for the business lines, types of customers, formation information, identification of persons associated with the Applicant.

 

Standard 2: (Licenses and Registrations): This standard consists of information requests regarding the Applicant's licenses and registrations overall and for the business activities to be conducted (e.g., required licenses and registrations, new or continuing registration or examination waivers, two-principal requirement waiver (if applicable), other SRO registrations and/or withdrawals, registered officers, directors, or control persons).

 

Standard 3: (Compliance with Securities Laws, Just and Equitable Principals of Trade): This standard consists of requests for information (e.g., disciplinary history) and documentation (e.g., state or federal orders or decrees, statements of claims, settlement agreements) that is necessary for the applicant to demonstrate compliance with the requirements of this standard.

 

Standard 4: (Contractual and Business Relationships): This standard includes information requests regarding an applicant's contractual and business relationships (e.g., description of contractual arrangements, expense sharing agreements, financing arrangements, fidelity bond, support and services agreements, auditor information).

 

Standard 5: (Facilities): This standard consists of information requests regarding an applicant's facilities (e.g., description of the facilities or locations to be utilized to conduct business, departmental information barriers, space sharing arrangements, lease and/or sub-lease agreements).

 

Standard 6: (Communications and Operational Systems): This standard includes information requests regarding an applicant's communications and operational systems (e.g., supervision arrangements at multiple locations, business continuity plan documents, order management/trading systems, use of internet and social media sites)

 

Standard 7:  (Maintaining Adequate Net Capital) This standard requests information regarding the applicant's net capital requirement, the nature and source of capital, and future funding sources.

 

Standard 8:  (Financial Controls) This standard requests information regarding an Applicant's financial controls and the proposed Financial and Operations Principal (FINOP) of the Applicant, including but not limited to the FINOP's experience, outside business or dual employment activities, if any.

 

Standard 9:  (Written Procedures) This standard requires information to support an assessment of the Applicant's compliance, supervisory, operational, and internal control practices and standards to ensure that they are consistent with practices and standards regularly employed in the investment banking or securities business, taking into account the nature and scope of Applicant's proposed business. The Applicant must provide a description of the Applicant's supervisory system and a copy of its written supervisory procedures.

 

Standard 10:  (Supervisory Structure) This standard requires information pertaining to the Applicant's supervisory system, including but not limited to the experience of supervisory personnel and the proposed Chief Compliance Officer of the Applicant.

 

Standard 11:  (Books and Records) This standard seeks information regarding the Applicant's recordkeeping system and a staff that is sufficient in qualifications and number to prepare and preserve required records.

 

Standard 12:  (Continuing Education) This standard requests information regarding an Applicant's Continuing Education program, which must include a Needs Analysis and Training Plan that takes into account, among other things, the Applicant's proposed business lines and product offerings. 

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 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.

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 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 office locations. This information is required for FINRA to evaluate the facilities to be used by the Applicant to conduct its business. 
     
  • Form BD - Uniform Application for Broker Dealer Registration. Information from Form BD will be retrieved for use in Form NMA. Importantly, this includes, but is not limited to, the business lines from Form BD which drive the corresponding pages of Business Lines in Form NMA. Therefore, the Applicant should ensure that Form BD is accurate and complete.
     
• 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, fingerpring cards must be submitted via first class mail, overnight courier, or hand delivery, if electronic submission has not been utilized.
    
• 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 $500 processing fee. See NASD Rule 1013(a)(3).
       
    • 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 is provided 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. While Applicants are provided these timeframes to respond, earlier submissions that are responsive to requests are welcome.
     
  • 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 "Requests and 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 for applications which are denied, the decision will be accompanied by a Membership Agreement, which must be executed and returned to FINRA by the Applicant.
     
  • Membership Effective: Other than applications which are denied, the Applicant will be notified of its effective date as a FINRA member 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 complete the application review process. The table below lists some common pitfalls and mistakes and how to avoid them.