Interview

The FINRA Membership Interview ("Membership Interview") is mandatory for all New Member Applicants and is a critical component of the New Member Application process, as it allows both FINRA Staff, including Member Application Program ("MAP")Staff and members of the FINRA District Office to which the Applicant will be assigned if admitted. The Membership Interview also provides the Applicant the opportunity to further exchange information relevant to the Application to ensure a comprehensive application review. This section is designed to inform you about the purpose of the Membership Interview, what can be expected when attending the Membership Interview, and how to best prepare for such 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 the Membership Interview
• How to Prepare for the Interview
• Attending the Interview
• Dependencies/Timing
• Common Pitfalls/Mistakes

Purpose of the Membership Interview

Given that much of the application process involves the exchange of information through written correspondence, the Membership Interview provides a unique opportunity for both the FINRA staff and the Applicant have an in person meeting. The Membership Interview also provides the opportunity for:

• FINRA staff 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 delineated in NASD Rule 1014.
   
• Providing a forum for FINRA staff to present any open or unresolved issues, identify new issues, problems or concerns about the application.
   
• Providing the Applicant with the opportunity to ask questions about the application process, FINRA Rules, and/or the regulation of a broker/dealer.
   
• Providing an environment in which the FINRA staff provides, to the Applicant or addresses, information received from sources other than the Applicant and upon which the MAP Staff 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

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.

FINRA staff will contact the Applicant's representative to determine a mutually agreeable time to conduct the Membership Interview and to inform the representative about the individuals required to attend, and the information required to be submitted at, the interview. Once the date is agreed upon, FINRA staff will send the Applicant a written notice of the Membership Interview, which will provide information necessary to facilitate the interview, including the items listed below.

• Date, time and location of the Interview: The Membership Interview is usually conducted at the FINRA District Office primarily responsible for regulating the Applicant if admitted, in which the Applicant will have its principal place of business, unless FINRA and the Applicant agree on another location.
   
• Required attendees for the Applicant: Those required to attend the Membership Interview on behalf of the Applicant may include persons indicated on Schedules A and/or B of the Applicant's Form BD and on Form NMA, and supervisory personnel identified in the Applicant's Business Plan, Written Supervisory, Compliance and other procedures. Please note that all persons identified in the Membership Interview notice are all required to attend the Membership Interview. Failure to attend the Membership Interview may provide grounds for the lapse of the application pursuant to Rule 1012.
   
• Additional information to be brought to the Interview: The Membership Interview affords FINRA Staff the opportunity to collect additional information needed required for processing the application to continue the processing of the application, including, but not limited to:
• • Information and documentation subject to an outstanding request or deemed by the FINRA staff to be necessary to the Application.
     
  • Updated financials, including net cap computation, 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, including but not limited to executed contractual agreements, such as leases, clearing agreements, fidelity bonds, etc..

How to Prepare for the Interview

• Discussion Topics. To prepare for the Membership Interview, the Applicant and its associated persons should come prepared to have a comprehensive discussion about the application. Topics generally addressed at the Membership Interview include the following:
• • Proposed business activities, including consistency between Form NMA and Form BD and any business activities or business development not previously presented to FINRA Staff;
     
  • Ownership and control of the Applicant;
     
  • Affiliates of the Applicant, including their roles, if any with the Applicant, and business arrangements and/or agreements between affiliates;
     
  • Transaction processing, including the handling of funds and securities;
     
  • Financials, including methods of capitalization, sufficiency of capital 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 business activity and personnel expansions;
     
  • Transaction processing, including the handling of funds and securities;
      
  • Books and records, including preparation and retention;
     
  • Proposed branch offices, including activities to be conducted at, and supervision of, such offices;
     
  • Events giving rise to a rebuttable presumption of denial pursuant to Rule 1014(b);
     
• Allow Sufficient Time for the Membership Interview. Be sure to allow sufficient time for the Membership Interview. This is particularly important where substantial travel will be required for attendance at the Membership Interview. Historically, Membership Interviews are approximately 1.5 to 3 hours.
   
• 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 Interview Notice previously discussed. Attendees representing FINRA include the MAP Examiner to whom the review of the application has been assigned, MAP Management, the Staff of the FINRA District Office primarily responsible for regulating the Applicant if approved.

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

• Introduction of attending FINRA staff and the Applicant representatives;
   
• Discussion of questions developed by the FINRA staff in its preparation for the Membership Interview;
   
• Requested for modifications to and clarifications of documentation previously submitted, (e.g., to Written Supervisory Procedures, Form BD, Form NMA, Form BR, and other documents as appropriate;)
   
• Requests for additional information;
   
• FINRA Staff will answer any questions and address and concerns raised by the Applicant about the application review and the process in general;
   
• Explanation about what an Applicant can expect as FINRA member if granted membership approval;
   
• Explanation of the next steps in the application review process;
   
• General conclusion of the Interview and the execution of acknowledgement of the Interview having been conducted
   
• Execution of acknowledgement of the Interview having been conducted.

Dependencies/Timing

• Post Membership Interview Requests. Subsequent to the Membership Interview, but prior to the issuance of the Application Decision, one or more of the following may occur:
• • FINRA staff may submit requests to the Applicant requiring additional information and/or documentation pertinent to the analysis of the application; and
     
  • FINRA Staff may conduct additional discussions with the Applicant and its designated representative either to obtain further clarity about information previously discussed, or to address new information obtained from the Applicant or another source after the Membership Interview.
     
• 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 NASD 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 you in preparing for the Membership Interview, the table below lists some common pitfalls and mistakes and how to avoid them.

 

Common Pitfalls and Mistakes	Mitigating Solutions
Who Does the Talking: During the Membership Interview, the Applicant exhibits a preference to have its hired consultants and/or law firm speak on its behalf.	The Applicant's associated persons are the ones who should, as a general matter, respond to the questions presented by the FINRA staff. Consultants and law firms representing the Applicant should not reply on its behalf. The Associated persons' responses are vital to FINRA staff's ability to evaluate the application.
Failure to Bring Requested Information: Applicant fails to bring requested information to the Membership Interview.	Note that requests for information requiring the Applicant to bring certain specified information and documentation to the Interview are to be treated in the same manner as all other FINRA staff requests for information. Bear in mind that failure to respond fully by the due date indicated may result in lapse of the application unless the FINRA staff and Applicant agree to another date.
Misunderstanding the Purpose of the Interview: Applicant does not understand the rationale behind the Membership Interview and is unprepared for FINRA staff's questions.	The Membership Interview is an important aspect of the new membership application review process. The Applicant and its associated persons should be prepared to discuss the proposed business activities and respond to FINRA staff's queries. If the Applicant is utilizing the services of a consultant and/or law firm to assist it with the application process, the Applicant and its associated persons need to ensure that they are in sufficiently regular communication with these hired representatives to understand the issues that may present themselves during the Membership Interview. See How to Prepare for the Interview above, for additional guidance on preparing for the interview.
Failure to attend the Membership Interview.	Bear in mind that failure to attend the Membership Interview may result in lapse of the application.