FINRA to Revise Outside Business Activities Rules

Posted on January 22nd, 2025 at 10:46 AM
FINRA to Revise Outside Business Activities Rules

From the desk of Jim Eccleston at Eccleston Law

The Financial Industry Regulatory Authority (FINRA) is seeking to overhaul its rules on outside business activities (OBA) and private securities transactions. As reported by AdvisorHub, FINRA's Board of Governors recently approved plans to publish a regulatory notice seeking public comments on a proposed new framework, referred to as the Outside Activities Requirements rule.

The proposed rule aims to modernize existing regulations, which many industry participants have criticized as outdated and difficult to comply with, especially now with the diverse business models of member firms.

Efforts to revise these rules have faced challenges. In May, FINRA’s Chief Legal Officer, Robert Colby, acknowledged prior reform attempts had stalled. One contentious issue is whether broker-dealers should be required to supervise the activities of dually registered brokers operating independent registered investment advisory (RIA) firms.

While FINRA does not oversee investment advisors, who are regulated by the SEC and state authorities, it does require broker-dealers to maintain some level of supervision and recordkeeping for their advisors' outside RIA activities. AdvisorHub also reports that the upcoming regulatory notice will provide specific details on the proposed rule changes and will invite public input, marking a significant step toward reforming its OBA framework.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

Return to Archive

TESTIMONIALS

Previous
Next

We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele

LATEST NEWS AND ARTICLES

October 23, 2025
Retail Access to Private Markets Raises Investor Protection and Regulatory Concerns

Robinhood Markets recently registered its first alternative investment vehicle, Robinhood Ventures Fund I, with the Securities and Exchange Commission (SEC).

October 21, 2025
Judge Denies Merrill Lynch's TRO in Advisor Transition

A federal judge has rejected Merrill Lynch’s request for a temporary restraining order (TRO) against a group of former financial advisors who left the firm to launch their own independent practice, OpenArc Corporate Advisory, under Dynasty Financial Partners’ platform with custody at Charles Schwab.

October 20, 2025
FINRA Accuses Former MML Broker of Cheating on SIE Exam

Regulators have accused a former MML Investors Services-affiliated broker of cheating on the Securities Industry Essentials (SIE) exam, according to a recent Financial Industry Regulatory Authority (FINRA) enforcement complaint.