The SEC has approved FINRA Rule 3290, which will replace FINRA Rules 3270 and 3280 with one consolidated framework for outside activities and private securities transactions.
The new rule narrows reporting requirements for low-risk, non-investment-related work while preserving oversight of activities that may create risk for customers or the firm. FINRA has not yet announced an effective date, so firms should continue following the current rules until further notice.
A Shift Toward Investment-Related Risk
Under current Rule 3270, registered persons generally must provide prior written notice of any outside business activity for which they receive compensation. That broad requirement can include activities that have little connection to financial services or customer risk.
Rule 3290 narrows the focus. It applies to investment-related activities performed outside the scope of a registered person’s relationship with the firm, as well as outside securities transactions.
This means firms will no longer be required by FINRA to collect and assess notice for low-risk, non-investment-related work such as bartending, driving for a car service or officiating sporting events.
The rule does not prevent firms from maintaining broader internal reporting requirements. A firm may still require personnel to disclose additional activities based on its own risk tolerance, employment policies or other regulatory obligations.
What Will Still Require Notice
Rule 3290 preserves prior written notice requirements for investment-related outside activities. Before engaging in a covered activity, registered persons must provide their firm with written notice describing the proposed activity.
Examples may include activities involving:
- Crypto asset-related business
- Fixed annuities
- Commodities
- Private placements
- Other investment-related products or services
Firms must assess whether the activity could interfere with or otherwise compromise the registered person’s responsibilities to customers. The assessment must also consider risks to the firm and its customers.
The approved rule sets a regulatory floor. Firms may take a broader approach, ask for additional information or prohibit certain activities when their risk assessment supports doing so.
Outside Securities Transactions Still Receive Heightened Review
Outside securities transactions involving compensation will remain subject to heightened supervisory requirements. Firms must approve or reject these activities in writing and, if approved, supervise them as though they were conducted through the firm.
Rule 3290 also clarifies that firms are not required to supervise a dually registered individual’s activities through an unaffiliated registered investment adviser. Those activities remain subject to SEC or state oversight. Firms may still evaluate related conflicts, customer risks or internal policy considerations.
What Firms Should Focus On
- Review OBA and PST policies. Identify provisions tied specifically to Rules 3270 and 3280.
- Update intake questions. Distinguish investment-related activities from lower-risk outside employment.
- Train registered people and reviewers. Explain the rule’s narrower scope and the activities that still require notice.
Rule 3290 does not eliminate outside activity oversight. It allows firms to focus more directly on the activities that present the greatest compliance risk.
