Regulation · Compliance
FINRA Poised to Deliver Relief From Burdensome Outside Business Rules
FINRA's proposal to revise its outside business activity rule is in its final stages, awaiting SEC approval — a welcome relief for brokers caught up in enforcement over innocuous outside work.
By Advisor News Network
June 12, 2026
4 min
Finra's proposal to revise its outside business activity rule is in its final stages now, awaiting approval from the Securities and Exchange Commission. If the new rule passes as lawyers expect, this will provide welcome relief for brokers who have found themselves caught up in Finra's enforcement process over seemingly innocuous outside work.
Brokers have been fired and then faced industry discipline for myriad activities, including rental homes and even — as one Finra executive noted — a goat herding business. Firms have been plagued by questions about whether or how they should be supervising these businesses, and in particular, what their responsibility is for overseeing an outside RIA.
The new outside business and private securities transaction rule would replace Rules 3270 and 3820, keeping the core disclosure and review structure intact while narrowing the scope to activities that pose clearer investor risk.
Advisors would still be required to provide prior written notice of investment-related outside activities and certain securities transactions. The key shift is that fewer activities would fall into that review process in the first place.
The proposal carves out a range of lower-risk conduct that has historically triggered compliance scrutiny. Personal investments, certain real estate transactions, and some crypto activity would no longer be treated as outside business activities in many cases.
TagsFINRARegulationComplianceOutside Business ActivitySEC
