On September 15, 2026, the U.S. Securities and Exchange Commission (“SEC”) approved FINRA Rule 3290 (Outside Activities Requirements) (the “Rule”), which will replace FINRA Rules 3270 (Outside Business Activities of Registered Persons) and 3280 (Private Securities Transactions of an Associated Person). The Rule is part of FINRA’s broader modernization initiative and narrows firm oversight to investment-related activities. Although the Rule changes the scope of covered activities, many of the existing obligations governing outside activities and outside securities transactions are either retained or carried forward in substantially similar form.
FINRA has not yet announced the effective date and will do so in a regulatory notice. Until the effective date, firms and associated persons should continue to follow Rules 3270 and 3280 while preparing revised policies, forms, training, and supervisory systems.
- Under Rule 3270, registered persons (generally limited to FINRA-licensed persons) are required to provide prior written notice before engaging in compensated or potentially compensated business outside their relationship with the firm. The rule reaches both investment and non-investment activities and requires firms to assess possible interference with the person’s duties and whether customers might view the activity as part of the firm’s business.
- Under Rule 3280, all associated persons (a broader group than FINRA-licensed persons) have to provide prior written notice of securities transactions outside the regular course of their employment. Transactions that provide selling compensation (a direct or indirect financial benefit) require written approval, books-and-records treatment, and supervision as if conducted for the firm. Transactions without selling compensation require written acknowledgment. FINRA guidance also applies this framework to certain outside investment-advisory activities.
The Rule, however, focuses only on “investment-related activities,” a category that broadly covers outside activities and outside securities transactions involving financial assets, including securities, crypto assets, commodities, derivatives, currency, banking, real estate, and insurance. Non-investment side work generally falls outside the Rule. Notably, activity at an unaffiliated registered investment adviser is treated as an outside activity rather than an outside securities transaction.
Registered persons and associated persons, as applicable, must provide their firms with prior written notice of the proposed activity, and members must review the proposed activity using specified criteria. The Rule standardizes the minimum assessment that members must conduct upon receiving notice of registered persons’ outside activities and associated persons’ outside securities transactions. This approach borrows from Rule 3270 but adds a new requirement to assess whether the activity involves a customer of the registered person or associated person.
The firm’s obligations depend on the activity’s risk:
- Outside Activities: The firm considers whether to impose conditions, limitations, or a prohibition. Approval, acknowledgment, and ongoing supervision are not mandated.
- Outside Securities Transactions Without Selling Compensation: The firm promptly acknowledges the notice in writing and may impose conditions. Supervision is not required.
- Outside Securities Transactions With Selling Compensation: The firm approves or disapproves the transaction in writing. If approved, the firm must record and supervise the transaction as if conducted on the firm’s behalf.
Moving forward, firms and associated persons should consider the following:
- Member firms should update written supervisory procedures, disclosure forms, training, and intake systems to reflect the new definitions and framework. They should also build controls to identify customer involvement, document classification decisions, and monitor compliance with any conditions imposed. In addition, firms should review outside-activity inventories to determine which matters remain reportable and how previously approved activities should transition.
Compliance teams should note that the approval order repeatedly states that “nothing in the proposed rule change would alter the well-settled principle that members must investigate ‘red flags’ indicating problematic activities.” Accordingly, firms should emphasize consistent classification, documentation of customer involvement, compliance with firm-imposed conditions, and clear distinctions between excluded personal crypto transactions and reportable investment-related conduct. Records should explain the firm’s reasoning and escalation decisions.
- Associated persons should learn the revised categories and continue to seek guidance before participating in investment-related outside activity. Non-investment side work may no longer require notice under the Rule, but Form U4 and firm-policy obligations may still apply. Outside securities transactions involving selling compensation still require written firm approval before participation.
For further guidance, please reach out to us to discuss your firm’s unique reporting and review procedures.