On January 22, 2026, FINRA filed a proposed rule change with the SEC to adopt FINRA Rule 3290, which would replace existing FINRA rules on outside business activities (OBAs) and private securities transactions (PSTs).¹ The proposal is part of FINRA’s “rule modernization initiative” and reflects feedback that FINRA received from its request for comments in Regulatory Notice 25-05. According to the rule filing, the purpose of the proposed rule change is to “reduce unnecessary burdens while maintaining core investor protections.”² In particular, FINRA would narrow the scope of its “outside activity” rules to focus on “investment-related activities,” which are more likely to pose a risk to member firms and the public. We highlight key takeaways from FINRA’s proposal below. 

I. Background on FINRA’s existing OBA and PST rules

Currently, OBAs and PSTs are governed by FINRA Rule 3270 and FINRA Rule 3280, respectively. Rule 3270 provides that no person registered with a FINRA member may serve in certain roles (e.g., employee, officer, director) or be compensated, or have a reasonable expectation of compensation, as a result of any business activity, unless he or she provides prior written notice to the member. Upon receipt of written notice, the member must consider whether the proposed activity will (1) interfere with or otherwise compromise the registered person’s responsibilities to the member and/or the member’s customers or (2) be viewed by the customers or the public as part of the member’s business. Based on its review of these factors, the member must determine whether to limit or prohibit the activity. The member also must evaluate whether the proposed activity is properly characterized as a PST subject to Rule 3280.

Separately, under FINRA Rule 3280, no person associated with a FINRA member (regardless of registration status) may participate in any manner in a PST, unless they comply with certain requirements. The associated person must provide written notice to the member describing in detail the proposed transaction and their proposed role in the transaction. If the associated person is to receive “selling compensation” from the transaction, the member must approve the transaction, record the transaction on its books and records, and supervise the transaction as if the transaction were executed on behalf of the member. If the associated person will not receive selling compensation, the member must provide the associated person with prompt written acknowledgment and may, at its discretion, require the associated person to adhere to specified conditions in connection with the transaction.

II. Key takeaways from FINRA’s proposal

The proposed rule addresses “outside activities” (which would replace OBAs) and “outside securities transactions” (which would replace PSTs). The obligations of members with respect to outside activities and outside securities transactions would be similar to the obligations of members with respect to OBAs and PSTs, respectively, under current FINRA rules. However, the proposal would modify FINRA’s existing rules in a few notable ways.

a. The proposed rule has a narrower scope of application

“Investment-Related” Outside Activities

Unlike current FINRA Rule 3270, proposed Rule 3290 would only apply to outside activities that are “investment related.” In its rule filing, FINRA stated that, by excluding outside activities that are not investment related, the proposal would allow members to shift resources to higher-risk activities. Proposed Rule 3290(f)(3) defines “investment-related activity” as “pertaining to financial assets, including securities, crypto assets, commodities, derivatives (such as futures and swaps), currency, banking, real estate or insurance.”

Outside Securities Transactions

Proposed Rule 3290 would generally maintain the exclusions in current Rule 3280. In particular, the proposed rule would exclude outside securities transactions among immediate family members for which there is no “selling compensation.” In addition, the proposed rule would exclude securities transactions subject to Rule 3210 (e.g., securities in an account held at another member) and transactions “delineated” in Rule 3210 (e.g., mutual funds, Section 529 plans, variable annuities). 

   New Exclusions

  Unlike the current FINRA rules, the proposed rule would also exclude:

1. The purchase, sale, rental or lease of a main home and up to two secondary homes that meet certain requirements; and
2. Any activity on behalf of a member or its affiliate, including investment advisory, insurance or banking activity. 

While current FINRA Rule 3280 only applies to securities transactions, the proposed rule would add a provision to clarify that the rule does not apply to “personal investments in non-securities.”

  Form U4

Independent of existing Rule 3270, Question 13 on Form U4 currently requires individuals registered with FINRA to disclose whether they engage in certain OBAs. The rule filing notes that the Form U4 disclosures go beyond the scope of the proposed rule change. FINRA said that it “would endeavor to work with the SEC and states to harmonize the requirements where appropriate.”³ 

b. The proposed rule would modify existing guidance regarding investment advisory activities

The proposal would modify the obligations of member firms with respect to investment advisory (IA) activities by associated persons. In the 1990s, FINRA (then NASD) issued a series of Notices to Members regarding IA activities.⁴ The notices provided guidance to member firms on the application of FINRA’s OBA and PST rules to associated persons who perform IA services on behalf of an investment adviser. In its rule filing, FINRA acknowledged that its prior guidance “caused significant confusion and practical challenges.”⁵ To address this issue, the proposed rule would modify the requirements for members with associated persons engaged in IA activities. Specifically, activity on behalf of an unaffiliated investment adviser registered with the SEC or with a state securities commission would be considered an outside activity rather than an outside securities transaction. Consequently, members would not be required to supervise the activity under the proposed rule. As noted above, IA activity on behalf of an affiliate (like any other activity on behalf of an affiliate) would be excluded from the rule entirely.

Note that when FINRA solicited comments in Regulatory Notice 25-05, it originally proposed to “maintain the status quo regarding members’ recordkeeping and supervisory responsibilities for outside unaffiliated IA activity.”⁶ FINRA amended its proposal after it received several comments urging it to do so.

  c. The proposed rule would codify FINRA staff’s existing interpretive positions 

The proposed rule would also codify certain interpretive positions:

• Portfolio Managers: Portfolio managers and investment committee members for registered investment companies, unregistered investment companies and certain other entities would be required to provide prior written notice to the member. However, the member would not be required to supervise and maintain records for the activity unless the associated person were selling shares for selling compensation.
• Allocation Agreements: If an individual associated with multiple FINRA members engages in an outside securities transaction for selling compensation, the members would be permitted to allocate regulatory responsibilities by written agreement.
• Gramm-Leach-Bliley Act ("GLBA") and Regulation R: The proposed rule would also codify guidance regarding member firm activity related to the GLBA and Regulation R. Regulation R exempts banks from the definition of “broker” under certain circumstances.⁷  Among other things, Regulation R implements the “networking exception” in Section 3(a)(4)(B)(i) of the Exchange Act, which permits bank employees who are not registered representatives of a broker-dealer to refer customers to a broker-dealer subject to several conditions.⁸
  • The proposed rule would clarify that an associated person’s activity that is pursuant to a contract between a member and another entity (e.g., a banking networking arrangement) would not be subject to the proposed rule if the activity is conducted on behalf of the member, as it is within the scope of the associated person’s relationship with the member. In a footnote, FINRA clarifies that such activity would be subject to broker-dealer supervision under FINRA Rule 3110.
  • An associated person’s securities activity on behalf of an unaffiliated entity that is not covered by a contract between the member and such entity but qualifies for GLBA or Regulation R’s exceptions to broker-dealer registration requirements would be considered an outside activity rather than an outside securities transaction.

d. FINRA would allow members to seek exemptive relief under Rule 9610

FINRA has also proposed to amend Rule 9610 to allow members to seek exemptive relief from the requirements of Rule 3290. FINRA noted that the proposed rule would still apply to a wide range of investment-related activities, even though it would apply more narrowly than the existing rules. Thus, member firms may request exemptive relief where “the specific facts justify an exemption.”⁹