FINRA's Outside Business Activity Rules Get a Significant Overhaul

On September 16, 2026, the SEC approved a FINRA proposal consolidating Rules 3270 and 3280 into a single new rule, Rule 3290, reshaping how broker-dealers oversee registered representatives' outside business activities. The reform narrows mandatory reporting and supervision to investment-related activities that present heightened risk — cryptocurrency, fixed annuities, commodities, and private placements among them — while removing the reporting burden for lower-risk, non-investment side activities. FINRA said the prior framework, rooted in 1990s-era guidance, had become logistically burdensome and raised privacy concerns as representatives' outside activities diversified. An effective date has not yet been set; FINRA is expected to announce implementation timing separately.

What this means for broker-dealers:

• Firms are no longer required to supervise a dually registered representative's activities at an unaffiliated RIA firm under this rule — a notable narrowing of broker-dealer oversight.
• Investment-related outside activities involving heightened risk (crypto, fixed annuities, commodities, private placements, compensated securities transactions) still require prior written notice and ongoing firm monitoring.
• Lower-risk, non-investment activities, such as bartending, rideshare driving, or officiating sports, are relieved of formal reporting and supervisory requirements.
• Firms should still assess whether an outside activity could interfere with customer responsibilities or create reputational or legal exposure, even where formal reporting is no longer required.

Some state regulators and investor advocates have raised concerns that reduced broker-dealer oversight of independent RIA activity could affect fraud detection — worth monitoring as implementation guidance develops.

ICS will continue to track FINRA's implementation guidance for Rule 3290 as firms begin updating their outside business activity policies and supervisory procedures.

Read the full article.

ICS advises financial institutions navigating regulatory changes of this type. If your firm needs to assess the impact of this development on your compliance program, contact us to discuss.