SEC Approves FINRA Rule 3290: Changes to the Outside Business Activities Rule
Big regulatory news from last week! The SEC has approved FINRA’s long-awaited overhaul of the rules governing registered representatives’ outside business activities (OBAs).
On September 15, 2026, the Securities and Exchange Commission approved new FINRA Rule 3290 (Outside Activities Requirements). The new rule will eventually replace two familiar rules: FINRA Rule 3270, governing Outside Business Activities (OBAs), and FINRA Rule 3280, governing Private Securities Transactions (PSTs).
We've summarized the relevant changes for registered representatives below, but please keep in mind: Rule 3290 is not yet effective. FINRA has not established an effective or implementation date. The SEC’s approval order specifically notes that FINRA will determine the effective date after balancing the time firms need to implement the new requirements against FINRA’s objective of reducing unnecessary compliance burdens.
So, for now, registered representatives and broker-dealers should continue complying with the existing requirements of Rules 3270 and 3280 while preparing for the transition to Rule 3290.
Why FINRA Is Changing the Rules
The current outside-business-activity framework is extremely broad. Under Rule 3270, registered representatives generally must notify their broker-dealer before engaging in compensated business activities outside the scope of their relationship with the firm. That can capture activities ranging from serving as an officer of another company to completely unrelated second jobs.
Rule 3280 separately governs private securities transactions conducted outside the regular course or scope of an associated person’s employment with the broker-dealer — the traditional “selling away” rule.
FINRA Rule 3290 consolidates these concepts into a single framework and focuses the broker-dealer’s regulatory obligations more directly on investment-related activities that potentially create risk for customers or the firm. In other words, FINRA is attempting to reduce the compliance resources spent reviewing low-risk, non-financial side activities while preserving — and in some cases clarifying — the oversight applicable to outside investment activity.
The Biggest Change: Not Every Outside Business Activity Will Be Reportable
Perhaps the most noticeable change for registered representatives is the narrowing of the traditional OBA requirement. Rule 3290 focuses on investment-related activities rather than outside business activities generally.
“Investment-related” is broader than simply “securities-related.” It includes activities pertaining to financial assets, including:
Securities
Crypto assets
Commodities
Derivatives, including futures and swaps
Currency
Banking
Real estate
Insurance
This means many ordinary, non-investment-related outside jobs will no longer trigger FINRA’s OBA reporting requirement under Rule 3290. A registered representative who bartends on weekends, coaches or referees sports for compensation, or operates another genuinely non-investment-related business, for example, would generally no longer have a Rule 3290 reporting obligation solely because of that activity. That is a meaningful departure from Rule 3270.
Broker-dealers, however, can maintain internal policies that are more restrictive than FINRA’s minimum requirements. Rule 3290 establishes the regulatory floor; it does not prevent a firm from requiring broader disclosure of outside activities.
Outside Investment-Related Activities Still Require Notice
The reduced scope should not be confused with elimination of the OBA concept.
A registered person who intends to participate in an investment-related activity outside the scope of his or her relationship with the broker-dealer — and which is not an outside securities transaction — generally must provide the firm with prior written notice.
The representative must describe the proposed activity and the representative’s role in it. Material changes to the activity also require updated prior written notice.
The firm must then assess the activity, including whether it:
Is actually an outside securities transaction;
Involves a customer of the registered person;
Could interfere with or compromise the registered person’s responsibilities to the broker-dealer or its customers; and
Could reasonably be viewed by customers or the public as part of the broker-dealer’s business.
Based on that assessment, the firm may impose conditions or limitations on the activity — or prohibit it altogether. And if the firm imposes conditions, it must reasonably supervise compliance with those conditions.
Outside Securities Transactions Remain a Different Category
Rule 3290 retains heightened requirements when an associated person participates in an outside securities transaction. Associated persons must provide prior written notice describing the proposed transaction, their role in it, and whether they will receive selling compensation. What happens next depends significantly on compensation.
No Selling Compensation
If an outside securities transaction does not involve selling compensation, the firm generally must assess the activity and acknowledge the notice in writing. The firm may also impose conditions or limitations.
Selling Compensation
If the associated person will receive selling compensation, the requirements become significantly more stringent. The associated person must obtain the firm’s prior written approval. If the firm approves the activity, it must record the transaction on its books and records and supervise the associated person’s participation as though the transaction were executed on behalf of the broker-dealer.
The above clarifies some of the requirements around securities transactions, but doesn't impose any meaningful changes.
A Major Change for Representatives With Unaffiliated RIAs
Rule 3290 also addresses a longstanding issue for individuals who are affiliated with both a broker-dealer and an unaffiliated registered investment adviser (although dual registration is not something that Britehorn Securities supports anyway).
Under FINRA’s historical interpretation of Rule 3280, certain securities transactions conducted through an unaffiliated RIA could be treated as private securities transactions that the broker-dealer was required to supervise and record as though conducted through the broker-dealer. Rule 3290 changes that approach. Investment advisory activity through an unaffiliated RIA generally will be treated as an outside activity, rather than an outside securities transaction subject to the full supervision and record-keeping requirements applicable to compensated PSTs.
The activity does not simply disappear from the broker-dealer’s compliance framework: prior notice and firm assessment requirements may still apply. But the broker-dealer generally will not be required by Rule 3290 to supervise the RIA’s advisory activity as if it were the broker-dealer’s own securities business. This is one of the more consequential changes for dual registrants.
What This Means for Independent Investment Bankers
For independent investment bankers, Rule 3290 should ultimately create a more logical distinction between outside activities that pose genuine securities or customer risks and ordinary business activities that have little relationship to the securities industry.
That does not mean outside investment activity will receive less scrutiny. An investment banker serving on the board of an operating company, owning another financial business, participating in a private placement away from the broker-dealer, receiving transaction-related compensation, engaging in real estate investment activity, or participating in another financial venture may still have significant disclosure obligations.
The central question under the new framework becomes less about whether someone simply has “another business” and more about what the activity actually involves, whether it is investment-related, whether securities transactions are involved, whether customers are involved, and whether compensation is tied to securities activity.
Rule 3290 Is Approved — But It Is Not Effective Yet
This distinction is particularly important right now. The SEC has approved Rule 3290. But FINRA has not yet announced its effective date or implementation date.
In fact, during the rule-making process, commenters requested as much as 12 months between SEC approval and implementation so that broker-dealers could modify compliance systems built around Rules 3270 and 3280. FINRA declined to establish the effective date as part of the proposal and said it would determine an appropriate date separately.
Until FINRA announces that date, Rules 3270 and 3280 remain the operative framework. Registered representatives therefore should not stop reporting an existing category of OBA simply because it will eventually fall outside Rule 3290. Likewise, firms should not prematurely discontinue their current OBA or PST procedures.
The appropriate approach now is preparation: broker-dealers should review their written supervisory procedures, disclosure forms, compliance technology and existing OBA/PST inventories so they are ready to transition once FINRA announces the effective date.
The Bottom Line
Rule 3290 represents a substantial modernization of FINRA’s outside-activities framework. For registered representatives, one of the biggest benefits will be the elimination of FINRA-mandated reporting for many non-investment-related side activities. For broker-dealers, that should allow compliance resources to focus more heavily on activities that present genuine securities, customer, conflict or reputational risks.
But for now, nothing changes operationally. Britehorn Securities will continue monitoring FINRA’s implementation guidance and effective-date announcement. We will notify all our registered representatives of any regulatory changes once they are effective, same as we've done with the reduction in waiting period for re-taking licensing exams and the increase of the gift limit to $300. For independent investment bankers considering joining a broker-dealer — or registered representatives with questions about how outside investment banking and business activities fit within a modern independent platform — contact us to learn more about our approach.
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