March 2011
Regulation of outside business activities, commonly referred to as “OBAs,” continues to
be a hot issue in the broker-dealer world. On December 15, 2010, FINRA adopted Rule
3270, which expands the reporting requirements for OBAs. Effective June 15, 2011,1
member firms will have to comply with these new requirements which now state:
“Any registered person is prohibited from being an employee, independent contractor,
sole proprietor, officer or director…being compensated or having a reasonable
expectation of compensation as a result of any business activity outside the scope of
the relationship with the member firm, unless prior written notification is provided to
the member firm.”2
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