Key Considerations for Introducing Broker-Dealers Heading Into 2027

Cutting through the noise: What should introducing broker-dealers prioritize in 2027?

FINRA publishes a steady stream of Regulatory Notices, rule filings and other updates, and that information is valuable to member firms. For a chief compliance officer (CCO) or chief financial officer (CFO) at a smaller firm, though, it can be hard to tell which updates apply to your firm and which ones require action. That challenge came up often at the 2026 FINRA Small Firm Conference in Chicago. Much of the recent change comes from FINRA Forward, FINRA’s initiative to modernize its rules, guidance and processes and empower member compliance. This insight sorts the most relevant recent and upcoming changes for introducing broker-dealers, including traditional brokerage firms and investment banking firms focused on M&A advisory and private placements, by who they affect and what, if anything, your firm needs to do.

Plan now: Outside activities (New Rule 3290)

Today, FINRA Rule 3270 requires registered persons to provide prior written notice to their firm before engaging in certain business activities outside the scope of their relationship with the firm. FINRA Rule 3280 governs private securities transactions, which are securities transactions outside the regular course or scope of a person’s work for the firm. Effective October 25, 2027, new FINRA Rule 3290 replaces both rules with a single framework. Key changes include:

• Investment-related only. Notice is required only for investment-related activities, which FINRA defines broadly to include activities related to securities, commodities, crypto assets, banking, real estate and insurance. Activities with no investment connection, such as refereeing or delivering food, no longer require notice.
• Key exclusions. Activities conducted on behalf of the member firm or its affiliates are excluded, as is buying, selling, renting or leasing a primary residence and up to two secondary residences.
• Who is covered. The outside activity requirements apply to registered persons, while the outside securities transaction requirements apply to all associated persons.
• Outside advisory work. Investment advisory activities conducted at an unaffiliated investment adviser are treated as outside activities, so the broker-dealer is no longer required to supervise or keep records of those activities.
• Compensated transactions. If the firm approves an outside securities transaction for which the person will be compensated, the firm must record the transaction on its books and records and supervise it as if it were the firm’s own transaction.
• Form U4. Rule 3290 does not change Form U4 disclosure obligations, so firms should consider what information they still need to collect before changing their processes.

Firms should use the lead time to review their outside activity procedures, questionnaires and attestations against the new rule. Regulatory Notice 26-20 includes the full rule text and a flowchart that walks through how the rule applies.

Recent changes to FINRA rules and SEC compliance requirements

• Gifts and non-cash compensation.  FINRA Rule 3220, often called the Gifts Rule, limits what a broker-dealer and its associated persons can give to an employee of another business, such as an institutional customer, vendor or counterparty, in relation to the business of the recipient’s employer. Effective March 30, 2026, the annual limit increased from $100 to $300 per person. The amendments also clarify that the rule does not apply to gifts to individual retail customers and codify existing guidance on topics such as valuation, supervision, recordkeeping and exceptions for personal gifts, bereavement gifts and de minimis or promotional items. FINRA made conforming changes to raise the gift limit to $300 in its non-cash compensation rules, which apply to the sale of direct participation programs, variable annuities, investment company securities and public offerings.
• Private placement filings (Rule 5123).  FINRA Rule 5123 generally requires broker-dealers to file a private placement memorandum, term sheet or other offering document with FINRA when they sell a private placement, unless an exemption applies. Effective October 21, 2026, FINRA expanded the exemptions to cover offerings sold to investors that meet the SEC’s accredited investor categories for certain family offices and certain entities with more than $5 million in assets under management.
• Regulation S-P.  The SEC’s amendments to Regulation S-P require firms to maintain a written incident response program for unauthorized access to customer information, notify affected individuals within 30 days of becoming aware of an incident involving their sensitive customer information and oversee service providers, including requiring them to notify the firm within 72 hours of a breach. Larger firms had to comply by December 3, 2025, and smaller firms by June 3, 2026, so most firms are now in their first year of compliance.

Other changes to know

• Exam retakes.  The waiting period to retake a failed FINRA qualification exam drops from 30 to 15 calendar days after a first or second failed attempt, and from 180 to 60 calendar days after a third or later failed attempt within two years, effective January 19, 2027.
• Senior leader continuing education.  Beginning November 2, 2026, firms have a voluntary option to let senior leaders meet their annual Regulatory Element continuing education requirement through a FINRA-created program delivered by the firm’s CCO or another senior compliance officer. The program runs for just over two years.
• Performance projections (Rule 2210).  FINRA Rule 2210, which governs communications with the public, has long prohibited projected performance and targeted returns, such as a target return on a private fund. On October 15, 2026, the SEC approved amendments that will allow them in certain communications, generally not to mass or general retail audiences, if the firm adopts written policies and procedures addressing the intended audience, provides disclosure of the underlying criteria, assumptions, risks and limitations and keeps records of the source. FINRA will announce the effective date in an upcoming Regulatory Notice.
• Intraday margin.  Effective June 4, 2026, FINRA replaced the pattern day trader rules, including the $25,000 minimum equity requirement, with intraday margin standards. Firms may phase in implementation through October 20, 2027, and introducing firms should confirm how their clearing firm is implementing the change.
• Late allocations.  Effective November 16, 2026, a principal no longer needs to review and approve allocations of investment adviser bulk orders received after trade date.

FINRA proposals to monitor

Remote inspections.  FINRA Rule 3110 requires firms to inspect offices of supervisory jurisdiction (OSJs) at least annually, non-supervisory branch offices at least every three years and non-branch locations on a regular periodic schedule. Under a voluntary pilot ending June 30, 2027, participating firms may conduct these inspections remotely, while firms not in the pilot must conduct them on-site. In June 2026, FINRA’s Board approved a proposal to make remote inspections permanent, which still requires SEC approval.

Fraud holds and trusted contacts.  FINRA has filed proposals with the SEC that would create Rule 2166, allowing an optional hold of up to 10 business days for a customer of any age when the firm reasonably believes fraud is involved, and extend holds under Rule 2165 for seniors and vulnerable adults from 55 to 145 business days in limited circumstances. Firms could also use the term “emergency contact” in place of “trusted contact person” and let customers name one contact across all of their accounts.

CEO certification and membership applications.  In September 2026, FINRA’s Board approved proposals to make the deadline for the annual CEO certification of compliance and supervisory processes more flexible and to better focus FINRA’s review of new and continuing membership applications on risk. Both will be filed with the SEC.

Beyond the rule changes: What FINRA emphasized at the conference

Aside from specific rules, several themes came up repeatedly in conference discussions about working with FINRA and being ready for an exam.

• Use your Risk Monitoring Analyst. Every firm has a dedicated Risk Monitoring Analyst who serves as its primary FINRA point of contact for questions about rules, filings and compliance resources. FINRA encourages firms to notify their analyst of material changes, including changes in key officers, ownership or business operations.
• Use the Oversight Report. FINRA’s Annual Regulatory Oversight Report summarizes findings and effective practices from its oversight programs. Its appendix describes how firms use the report, including gap analyses of their compliance programs and written supervisory procedures (WSPs) and adding findings to firm training. Reviewing your own prior exam findings alongside the report is a practical place to start.
• Know your controls. FINRA assesses risk based on the likelihood of an adverse event, after considering the effectiveness of a firm’s controls, and the potential impact if it happens. WSPs and controls that are well documented and match how your firm actually operates make a difference.
• Generative AI. FINRA has reminded firms that its rules, which are intended to be technology neutral, continue to apply when firms use generative AI, including its supervision and communications rules.
• Fraud and cyber intelligence. FINRA’s Financial Intelligence Fusion Center, launched March 31, 2026, is a secure portal where member firms can receive and share cybersecurity and fraud threat intelligence without attribution. Access is granted through FINRA Gateway.

How can Keiter help your firm navigate FINRA updates?

Not every FINRA update requires action, but a few, especially Rule 3290, deserve attention now. If you have questions about how these changes may affect your firm’s compliance program, financial reporting or annual audit, contact Keiter’s broker-dealer team | 804.747.0000.

Sources

• FINRA – 2026 Small Firm Conference
• FINRA Regulatory Notice 26-20 (Rule 3290 and FINRA Forward)
• FINRA Regulatory Notice 26-05 (Gifts Rule)
• FINRA Regulatory Notice 26-19 (Rule 5123)
• SEC Approval Order, Release No. 34-105987 (Rule 5123)
• SEC – Regulation S-P Small Entity Compliance Guide
• FINRA Regulatory Notice 26-18 (Exam Retakes)
• FINRA Weekly Update – CE Option Designed for Senior Leaders Launches
• FINRA Rule Filing SR-FINRA-2026-023 (Rule 1240.03)
• SEC Approval Order, Release No. 34-106675 (Rule 2210)
• FINRA Weekly Update – SEC Approves Performance Projections Rule Changes
• FINRA Regulatory Notice 26-10 (Intraday Margin)
• FINRA Regulatory Notice 26-17 (Late Allocations)
• FINRA Rule 3110 (Supervision)
• FINRA – Remote Inspections Pilot Program
• FINRA – Report From Board of Governors Meeting, June 2026
• FINRA Weekly Update – FINRA Proposes ‘Speed Bump,’ Enhanced Tools to Protect Investors
• FINRA Rule Filing SR-FINRA-2026-018
• FINRA – Report From Board of Governors’ September Meeting
• FINRA – Risk Monitoring Program
• FINRA – 2026 Annual Regulatory Oversight Report
• FINRA – Oversight Report Appendix: Using FINRA Reports in Your Firm’s Compliance Program
• FINRA – Approach to Member Firm Risk Assessments
• FINRA Regulatory Notice 24-09 (Generative AI)
• FINRA – Financial Intelligence Fusion Center