Navigating the Regulatory Filing Landscape: Form BD, NMA, and CMA Explained

Nov 25

Under the Securities Exchange Act of 1934, a broker-dealer is generally any person or entity engaged in the business of effecting securities transactions either for others or for its own account.

A broker, under 15 U.S.C. § 78c(a)(4), is defined as any person engaged in the business of effecting transactions in securities for the account of others. This includes firms that execute trades, solicit investors, operate trading platforms, or are otherwise involved in facilitating securities transactions on behalf of clients.
A dealer, under 15 U.S.C. § 78c(a)(5), is any person engaged in the business of buying and selling securities for their own account, but not merely as an investor. Dealers typically make markets, quote prices, or hold themselves out as ready to buy or sell securities on a regular basis.

A firm that engages in either or both sets of activities (that is, executing trades for clients or trading for its own account in the ordinary course of business) is required to register as a broker-dealer, unless an exemption applies.

In today’s video, embedded below, we will examine three critical regulatory filings that broker-dealer applicants and existing members must understand: Form BD, the New Member Application (NMA) under FINRA Rule 1013, and the Continuing Membership Application (CMA) under Rule 1017.

SECTION I – Form BD

Form BD is the Uniform Application for Broker-Dealer Registration, filed through FINRA’s Central Registration Depository (CRD) system. It is required for registration with the SEC, FINRA, and applicable state securities regulators.

This form functions as a foundational disclosure document. It provides regulators with essential information regarding the applicant’s ownership and control structure, business lines, clearing and custody arrangements, affiliations, and disciplinary history.

Importantly, Form BD must be amended promptly whenever the information it contains becomes inaccurate or incomplete.

SECTION II – The New Member Application (NMA)

While Form BD initiates the registration process, FINRA membership is granted through the New Member Application, or NMA, pursuant to FINRA Rule 1013. The NMA is reviewed by FINRA’s Membership Application Program (MAP) Group and requires the applicant to demonstrate compliance with each of the twelve standards set forth in Rule 1014(a).

This includes:

1. A fully documented business plan

2. Adequate net capital and financial projections

3. Identification of licensed principals

4. Execution-ready clearing and operational agreements

5. A comprehensive set of Written Supervisory Procedures (WSPs)

For technology-enabled or digital asset firms, FINRA expects the platform to be fully operational and capable of demonstrating the complete transaction lifecycle—onboarding, execution, clearance, settlement, and internal surveillance protocols—at the time of submission. The application must be substantially complete at filing. Incomplete submissions will be rejected and subject to forfeiture of fees.

SECTION III – Continuing Membership Application (CMA)

Once a broker-dealer is an approved FINRA member, any material change in business operations must be evaluated under FINRA Rule 1017, which governs the Continuing Membership Application (CMA).

Material changes include:

1. A merger or acquisition involving another member firm

2. A direct or indirect change in control involving 25% or more of equity or partnership capital

3. The addition of new business lines—such as underwriting, proprietary trading, or market making

4. Expansion in personnel or branch offices beyond safe harbor thresholds

5. Changes to the firm’s clearing, custody, or product mix that affect capital requirements or supervisory obligations

It is a common mistake to assume that filing a Form BD amendment satisfies CMA obligations. It does not. The two serve different regulatory functions. A CMA requires prior FINRA approval before the change is implemented.

CONCLUSION

In summary: Form BD initiates registration, the NMA grants membership, and the CMA governs material changes thereafter. Each filing interacts with the others, and compliance requires precision, foresight, and a comprehensive understanding of the regulatory architecture.