At its June 2025 meeting, FINRA’s Board of Governors advanced key rule proposals and strategic oversight priorities, reflecting a broader regulatory recalibration.

Among the approvals were targeted amendments to Rule 4311, aiming to clarify tri-party carrying arrangements and streamline reporting obligations, and to Rule 2210, easing restrictions on performance projections for broker-dealers under tightly defined conditions.

The Board also confirmed new Advisory Committee appointments and continued long-term financial planning, including approving the 2024 Annual Financial Report.

Intermediated arrangements

FINRA Rule 4311 governs the agreements under which introducing firms delegate the carrying of customer accounts, either on an omnibus or fully disclosed basis, to registered carrying firms. At its core, the rule ensures that such delegation is formalized through contracts that clearly allocate operational responsibilities, uphold regulatory safeguards, and facilitate oversight.

These contracts must also be pre-approved by FINRA, with provisions for updates and annual reporting to maintain transparency and accountability.

In response to the evolving structure of brokerage operations, the proposed amendments seek to demystify tri-party arrangements where an introducing firm intermediates services between a customer-facing firm and a carrying firm.

This “piggyback” model has become increasingly common, yet the current regulatory framework leaves room for interpretive ambiguity. The revision would formally recognize such layered relationships, requiring that all indirect parties be identified and bound within the same agreement, thereby tightening control and regulatory traceability.

The amendments also aim to clarify the allocation of functions between firms, particularly in arrangements involving omnibus accounts where individual customers are not directly identified by the carrying firm.

By reinforcing obligations around due diligence, customer notification, and risk assessment, the revision bolsters FINRA’s capacity to oversee complex operational webs and prevent regulatory evasion. In addition, the proposals streamline the reporting mechanism, especially regarding exception reports, by better defining the reporting obligations between parties.

In practice, the changes reflect FINRA’s intent to reduce compliance burdens where appropriate without compromising investor protections. By improving definitional clarity and rebalancing operational responsibilities in line with current industry practices, the amendments signal a shift toward regulatory precision.

Yet they also preserve FINRA’s gatekeeping role, ensuring that all parties, whether direct or indirect, remain visible, vetted, and accountable in the custody and processing of customer assets.

Forward-looking claims

FINRA Rule 2210 governs all public-facing communications by broker-dealers, from client-facing emails to glossy marketing materials. The rule has long prohibited performance projections (statements forecasting future returns or performance) in retail communications.

This categorical ban reflects regulators’ concern that such claims, even if framed as estimates, could mislead unsophisticated investors or mask product risks. While certain tools such as hypothetical illustrations or analysis software were allowed under tightly constrained conditions, members were generally barred from publishing forward-looking financial expectations.

The new proposal does not throw open the gates to performance marketing. Instead, it carves out a narrowly tailored exception: permitting the inclusion of projected performance and targeted returns under specific, compliance-heavy conditions.

To qualify, members must adopt formal policies and procedures for projection-based content; demonstrate a reasonable basis for the assumptions used (such as market volatility, interest rate paths, or macroeconomic scenarios); and include specific disclosures. The aim is not to encourage speculation but to align broker-dealer rules with those already applicable to investment advisers under SEC guidance.

This proposed shift reflects FINRA’s ongoing effort to harmonize its regulatory posture with SEC frameworks, particularly under the Investment Advisers Act, where projections, when properly caveated, have long been permissible.

As broker-dealers increasingly compete with advisory platforms or operate within hybrid structures, the asymmetry in permissible communications has drawn criticism. The proposed revision offers a response to that concern, while maintaining the principle that such communications must be responsibly constructed and transparent in their limitations.

Expanding the tent

FINRA’s decision to broaden its Advisory Committees by adding new members signals a strategic recalibration in how the self-regulatory organization sources industry expertise and stakeholder input.

These 12 committees, ranging from investor protection to market regulation, serve as vital conduits between FINRA and the diverse ecosystem of broker-dealers, clearing firms, and institutional actors it oversees.

The infusion of new voices, including from smaller firms and non-industry participants, could enhance the quality and balance of regulatory feedback, particularly as the rulebook is reshaped to reflect technology-driven changes in trading, compliance, and risk.

“We are excited to welcome the new members of the Advisory Committees. Participation and engagement in the Advisory Committees leads to meaningful feedback on a variety of regulatory matters. The Board values that input as we work to provide strategic guidance for FINRA’s vital work of protecting investors and maintaining market integrity,” said FINRA Board Chair Scott Curtis.

This expansion arrives at a time when FINRA faces mounting challenges in enforcement and oversight. Recent disciplinary actions underscore the persistent risks: from cybersecurity lapses and TRACE misreporting to undisclosed criminal histories and outright fraud.

While advisory committees do not issue sanctions themselves, they help shape the regulatory infrastructure and guidance that informs both compliance behavior and enforcement thresholds.

A more diverse and representative advisory ecosystem may ultimately strengthen the credibility of FINRA’s rulemaking and sharpen the tools available to its enforcement arm, especially as violations grow in technical complexity and cross-border scope.