FINRA Guidance on Negative Consent for Bulk Customer Account Transfers

FINRA Regulatory Notice 26-03 provides updated guidance on the use of negative consent for bulk customer account transfers, aiming to reduce compliance burdens for member firms. The notice eliminates the prior requirement for firms to obtain FINRA staff's "no objection" on draft letters before sending them to customers. It consolidates existing guidance and offers effective practices for firms to consider when implementing negative consent procedures for account transfers, particularly in situations driven by changes in business operations or the cessation of business.

This guidance does not introduce new legal or regulatory requirements but clarifies FINRA's stance on negative consent in specific bulk transfer scenarios. Firms are still obligated to ensure their practices are reasonably designed to achieve compliance with relevant regulatory obligations. The notice is intended to enhance efficiency and minimize disruptions to customer accounts during such transfers. Questions can be directed to FINRA's Office of General Counsel or Office of Financial and Operational Risk Policy.