FINRA Regulatory Notice 25-05: Streamlining Outside Activity Rules for Associated Persons

FINRA has released Regulatory Notice 25-05, inviting public comment on a proposal aimed at reducing compliance burdens tied to outside business activities (OBAs) and private securities transactions (PSTs). The proposal seeks to consolidate FINRA Rules 3270 and 3280 into a single, streamlined rule that clarifies expectations for registered and associated persons, while maintaining strong investor protections.

Key changes include:

• Focus on investment-related activities to reduce unnecessary reporting of low-risk activities.
• New definitions and exclusions for non-securities business activities.
• Refined notice and review procedures for members regarding associated persons’ outside roles.
• Clarification of responsibilities concerning outside investment adviser (IA) activity and supervisory obligations.

The comment period is open until May 13, 2025. Compliance officers, legal teams, and financial institutions are encouraged to review and provide feedback on how these regulatory changes may impact their firms.