FINRA's Outside Activities Proposal

On March 14, 2025, FINRA proposed amendments to reduce unnecessary burdens regarding the requirements to report outside activities of broker-dealers' associated persons. The proposal, contained in Regulatory Notice 25-05, streamlined these obligations to help broker-dealers focus on investment-related outside activities that present higher risks to investors and firms.

The proposed rule language states in the "exclusions" section that the rule shall not apply to an associated person's personal investments in securities transactions subject to or delineated in Rule 3210 (which includes, among others, mutual funds, variable annuities, 529s and securities held at another broker-dealer), personal investments in non-securities (which would include Bitcoin), and the purchase, sale, rental or lease of a main home, dwelling unit or vacation home. In other words, an associated person would not need to report any such personal activities, much less receive approval from their firms, before engaging in them.

To help broker-dealers focus on investment-related outside activities that present higher risks to investors and firms.

In addition, the proposed rule states in the "exclusions" section that the rule shall not apply to an associated person's activity on behalf of a member's affiliate (which would include an investment adviser, insurance or banking affiliate).

The comment period for Regulatory Notice 25-05 ended May 13, 2025.