Gaining approval of a material change in business or other type of membership application is dependent upon whether the standards for admission are satisfied. These standards are spelled out in FINRA Rule 1014(a). However, prior to evaluating whether the standards have been satisfied, FINRA will evaluate whether an application for membership (a “MAP” application) is “substantially complete” and if not, it may reject that application. FINRA Rule 1017(d) provides that FINRA must determine, within 30 days of receiving an application for change in ownership, control or business operations, whether that application is considered by FINRA to be substantially complete. If not, FINRA will send a letter to the applicant notifying them of the substantially incomplete status.
A similar provision applies to new member applications and is spelled out in FINRA Rule 1013(a)(3). While the term “substantially complete” is not defined specifically in the rule, experience has shown that FINRA is generally quite generous when it comes to making that determination. The rules provide a period of 30 days from the date of filing for FINRA to make its determination. Should it decide to reject an application, the application is deemed not to have been filed at all. And, FINRA returns the application fee less $500. FINRA will also provide an outline of the reasons it viewed the application as substantially incomplete. An applicant will then be required to re-file the application once it has been further developed (along with the full application fee).
Even an application that is not rejected by FINRA as substantially incomplete can have serious issues if it requires substantial revision. Submitting a complete application can significantly reduce its duration. Because the application process is complex and requires a major investment of time and resources, it often makes sense to involve a professional FINRA CMA expert to assist.
Mitch Atkins, FINRA’s former Senior Vice President and Regional Director has extensive experience with the FINRA membership application process and particularly with ensuring that applications meet the standards specified in FINRA’s Membership Rules. Contact Mitch Atkins, Principal of FirstMark Regulatory Solutions at 561-948-6511 with your questions about FINRA’s MAP process.
