ADISA submitted comments regarding the request for public comment set forth in Regulatory Notice 25-04. The Notice contains a broad request for comments on way to modernize FINRA rules, interpretations and guidance. ADISA appreciates the opportunity to provide comments on behalf of its members and wants to ensure that its input provided in the most constructive manner possible. 

1. Rule 2210 – Communications with the Public.
   1. “First Touch” Communications with Potential New Clients.

      ADISA requests that FINRA allow streamlined disclosure for “first touch” communications with potential new clients, with full Reg BI obligations to apply after a relationship is established.

   2. Use of Investment Objectives in Communications.

      ADISA requests that FINRA permit BDs to communicate investment objectives of products to potential investors, ensuring full disclosure, level competition with issuers, and the protections of Reg BI.

2. Rule 3110.19 – Residential Supervisory Location.

   ADISA recommends that FINRA permit new principals with prior supervisory experience to qualify for a Residential Supervisory Location in their first year, supporting smaller BDs.

3. Rule 3270 – Outside Business Activities of Registered Persons.

   ADISA recommends that FINRA exempt non-financial or non-securities related outside business activities from Form U4 disclosure and approval requirements to avoid unnecessary client confusion and administrative burden.

4. Form U4 Disclosures (Item 14 of the Form U4.)

   ADISA requests that FINRA clarify online BrokerCheck disclosures to avoid duplication and confusion for clients.

5. SEC Rule 506(b) Offerings.

   ADISA requests that FINRA update its interpretation of “substantive pre-existing relationship” to allow BDs to recommend evergreen private placements to newer clients, ensuring greater investor choice and compliance with Reg BI.

6. Rule 3130 Annual Certification of Compliance and Supervisory Process for Smaller Broker-Dealers.

ADISA urges FINRA to issue guidance clarifying that, for smaller Broker-Dealers, an in-person or formal meeting with the CCO is not required as part of the CEO certification process.

The letter was drafted by ADISA’s Legislative & Regulatory Co-Chairs Deborah Froling, Kutak Rock, and Catherine Bowman, The Bowman Law Firm. It was signed by ADISA President John Grady, ABR Dynamic Funds.

Read the letter in its entirety here.