Membership and Material-Change Applications

What this video covers

• How the New Membership Application (Form NMA) establishes a baseline scope of business that FINRA uses to judge every later expansion
• Why the 25% ownership threshold for a Continuing Membership Application (Form CMA) applies in the aggregate across multiple transactions by the same beneficial owner, not just single purchases
• The strict before-the-fact filing rule: a Form CMA must be filed and approved before any material change in operations, ownership, or control takes effect, never after
• Why materially new products or services outside the original scope (options, municipal underwriting, direct participation programs) trigger a Form CMA while new products within an existing line typically do not
• How a material expansion in scale or risk profile of an existing product line (low-volume principal trading to high-frequency market making) can itself trigger the CMA requirement
• The distinction between the Form CMA as the perimeter gate (firm-level FINRA membership scope) and the internal new-product committee as the account-level gate (customer suitability)
• The three critical FINRA deadlines: 30 days after the membership interview, 45 days after filing if no interview is required, and the 180-day backstop for escalation to the FINRA board