An existing member firm files for approval of a change in its ownership. Does the Rule 1000 Series treat it as an Applicant?

No — the term is confined to persons seeking membership for the first time, existing members being covered separately

Yes — the term covers an existing member seeking approval of such a change as well as a person seeking new membership

Yes, but only where the change would require the firm to be re-admitted altogether rather than merely to amend its existing agreement

No — an existing member becomes an Applicant only if its application is denied and it reapplies afresh

The Associated Person definition runs to seven prongs. What does the seventh add that the first six do not?

People who have left the applicant within the preceding twelve months, so that recent departures and their conduct remain inside the fitness review

People associated with any affiliate of the applicant, whether or not the affiliate is itself under common control

People the applicant anticipates bringing in — the definition reaches those who will be, not only those who already are

People whose functions are solely clerical, who are excluded by the fourth prong and restored by the seventh

Which of these falls inside the Associated Person definition, and which outside?

A person controlling the applicant is inside whatever their registration status; an employee whose functions are solely clerical is outside

A person controlling the applicant is inside only if registered; an employee whose functions are solely clerical is inside regardless

Both are inside, the definition drawing no distinction by function or by registration status

Both are outside, the definition reaching only natural persons registered under FINRA rules

What threshold makes an unresolved consumer-initiated arbitration claim a Covered Pending Arbitration Claim?

The claim amount, alone or aggregated with others, exceeding the relevant member's minimum net capital requirement

The claim amount, alone or aggregated with others, exceeding the relevant member's excess net capital

The claim amount exceeding a fixed dollar figure the rule specifies, adjusted periodically for inflation

The claim having remained unresolved for longer than the period the rule allows for arbitration to conclude

A consumer-initiated arbitration claim seeks compensatory loss, punitive damages and attorney's fees. Which of those counts toward the threshold?

The compensatory loss and the punitive damages, fees alone being excluded as costs rather than damages

The whole amount claimed, since the threshold measures exposure rather than the character of the loss

The claimed compensatory loss alone — pain and suffering, punitive damages and fees are all excluded

Whichever components the arbitrators have indicated they will entertain once the claim is heard

The threshold is measured against a member's excess net capital. Whose, in an expansion as against a transfer?

The hiring member's in both cases, since it is the firm taking on the exposure that the test protects

The transferring member's in both cases, since the claim arose while the person was associated with it

Whichever of the two has the lower excess net capital at the date the application is filed

The hiring member's in an expansion; the transferring member's where the transfer provision is engaged

What work does the Interested FINRA Staff definition do in the Rule 1000 Series?

It names exactly whose role in a proceeding brings them within the ex parte communication prohibitions

It names which staff are authorised to decide an application, others being barred from doing so

It names which staff must be recused from every application, regardless of their role in the particular one

It names which staff an applicant may contact about a pending application without going through counsel

What does the Rule 1000 Series mean by a sales practice event?

A customer complaint or arbitration that has already been resolved against the member or against its associated person

A customer complaint, arbitration or civil litigation reported to the Central Registration Depository or otherwise to FINRA

A regulatory finding of a sales practice violation made by FINRA or by another self-regulatory organisation

An internal review by the member concluding that a sales practice rule has been breached

Which forms make up the Uniform Registration Forms, and why does the definition matter beyond itself?

Forms BD, U4 and U5 — and the definition matters chiefly for calculating when an amendment to one of them falls due after a reportable event occurs

Forms U4, U5 and U6 — and the definition matters chiefly for identifying which filings reach BrokerCheck

Forms BD, U4, U5 and U6 — and several other defined terms are built on what is or should be disclosed on them

Form NMA and its schedules — and the definition matters chiefly for what a new applicant must submit

What monetary or sanction threshold makes an event a specified risk event?

Any amount at all, the threshold operating on the number of events rather than on their size

Fifteen thousand dollars or more in every case, a sanction short of money not qualifying however severe

Fifty thousand dollars or more, or alternatively a bar, expulsion, revocation or suspension

Fifteen thousand dollars or more, or alternatively a bar, expulsion, revocation or suspension whatever the sum involved

A firm proposes to take on a person who has two qualifying risk events in the last five years and no criminal matter. What follows?

A mandatory materiality consultation with the Department before the firm proceeds

Nothing, since the trigger requires a criminal matter and risk events alone do not engage it

An automatic denial, the person being disqualified from association for the remainder of the period

A continuing membership application, the consultation route being reserved for changes of ownership

FINRA Rule 1017 requires an existing member to apply for FINRA's approval of certain changes before it proceeds with them. What part do FINRA Rule 1011's definitions play in that requirement?

They set out the procedure a member follows once it has decided the requirement applies to it

They fix the operative thresholds that decide when the requirement is engaged at all

They list the sanctions FINRA may impose on a member that fails to meet the requirement

They set the time within which a member must file once it decides to make the change

The Department denies an existing member's application for approval of a change in its business operations. What review of that decision is open to the member?

Review only of whether the Department followed its procedures, the merits being open to review for new applicants

None within FINRA, a member's remedy being to amend the application and refile it with the Department for a fresh decision on the change

The same review a firm denied new membership can seek, the member being an Applicant with the same procedural rights

Review by the Commission directly, the internal review route being reserved to firms seeking admission for the first time

A FINRA member carries on its existing business and has no application of any kind pending before FINRA. Is it an Applicant for purposes of the Rule 1000 Series?

No — a member becomes an Applicant only when the Department, acting on its own initiative, opens a review of the member's business operations

Yes — every member remains an Applicant for as long as its membership continues, the admission standards applying to it throughout

Yes — a member is an Applicant during any period in which FINRA is conducting a routine examination of its business operations

No — a member becomes an Applicant only on filing or applying for approval of a change in ownership, control or business operations

An Applicant controls a separate business engaged in investment banking whose personnel are exempt from registration. Do those personnel fall within the Associated Person definition?

Yes — persons engaged in investment banking or securities business the Applicant controls are included, registered or exempt

No — the definition looks upward to persons who control the Applicant, not downward to businesses the Applicant controls

No — a person exempt from registration is outside the definition unless they are an officer or director of the Applicant

Yes, but only once they register, an exempt person entering the definition when registration under FINRA rules is obtained

A person holds no title at an Applicant but, under a consulting arrangement, performs the functions of a branch manager. Is that person within the Associated Person definition?

No — the definition turns on title, so a person holding no office such as branch manager stands outside it

Yes — the definition reaches anyone occupying a similar status or performing similar functions to a branch manager

No — a consultant is not an employee, and the definition reaches employees and persons registered under FINRA rules

Yes, but only if the person also holds a FINRA registration covering the functions of a branch manager

A pending customer arbitration claims $400,000 in compensatory loss from a representative jointly with two other brokers, and the representative expects his firm to indemnify him. What claim amount is attributed to him for the Covered Pending Arbitration Claim test?

Nothing, since the indemnity means that his firm rather than he will bear whatever loss is awarded

About $133,333, one third of the claim, liability being shared equally among the three brokers who are named

The full $400,000, being the most he is potentially liable for, whatever the co-respondents or the indemnity

$400,000 less whatever he reasonably expects to recover from the two co-respondents if liability is shared

Which FINRA unit is 'the Department' in the Rule 1000 Series?

The Registration and Disclosure department, which maintains the registration records of individuals

The Department of Enforcement, which brings charges where an applicant misstates its application

The Department of Market Regulation, which surveils the trading an applicant proposes to conduct

The Department of Member Regulation, which administers the membership application process

A person sits on the board of directors of FINRA Regulation but not on FINRA's own board. Is that person a Governor for purposes of the Rule 1000 Series?

No — a Governor is a member of the FINRA Board, and the FINRA Regulation Board is a distinct body

Yes — the FINRA Regulation Board is the FINRA Board under another name, so its directors are Governors

Yes — the term covers a director of FINRA or of any FINRA subsidiary that oversees regulatory matters

No — the term refers to a FINRA officer who heads one of its regulatory departments, not to any member of a board of directors

A firm's application for FINRA membership names the place it intends to have its principal place of business. What is the district office for the district covering that place?

A branch office of the applicant itself, registered with FINRA for the district it sits in

An office of FINRA located in that district, where the membership interview is normally held

An office that FINRA's registration department maintains for firms based in that district

An office of the Commission's regional staff that reviews applications arising in that district

Who is a 'Director' for the purposes of the FINRA Rule 1000 Series definitions?

The FINRA employee who heads a district office and supervises the examination staff working in it

A member of the FINRA committee that oversees the district offices and the staff working in them

A member of the Board of Directors of FINRA Regulation, the board that establishes the districts

A senior member of the Department's staff assigned to oversee applications arising in one district

The District Director for the district concerned took no part in reviewing or deciding a membership application. For that proceeding, is the District Director Interested FINRA Staff?

Yes, provided the District Director has since communicated with the applicant about its pending application

No — the definition reaches employees who directly participate in the decision or supervise someone who does

No — a District Director is covered just for applications by members that the district's own staff have previously examined

Yes — the District Director for the relevant district is named in the definition by office, whatever their involvement

A member that has only ever executed trades as agent for its customers plans to underwrite securities offerings for the first time. How does the Rule 1011 definition treat that plan?

As a material change in business operations, underwriting for the first time being one of the changes the definition names

As outside the definition, which reaches changes of ownership or control rather than the addition of new business lines

As a material change only where the underwriting commitments it takes on would exceed its excess net capital

As outside the definition unless the member at the same time begins to make markets in the securities it underwrites

A member goes ahead with a change that is a material change in business operations without first filing for FINRA's approval of it. What is the member's position under the rule that required that filing?

Nothing further follows, provided it reports the change on its Form BD within the ordinary amendment period

It is out of compliance with that rule, the required application not having been filed

Its membership terminates automatically, with no proceeding needed before the termination takes effect

It must reverse the change but faces nothing further, the filing requirement being procedural only

An Applicant's officers direct and control its business from an executive office in Chicago, but most of its associated persons, and the books and records it needs to run the business, are in Dallas. What is its principal place of business?

Chicago conclusively, the Applicant's executive office binding the Department whatever the operations in Dallas

Dallas automatically, the definition fixing the principal place of business wherever most associated persons work

Chicago by default, though the Department may determine that Dallas is the principal place of business

Whichever of the two offices the Applicant names on its application, provided a principal is based there

What is the Subcommittee in the Rule 1000 Series?

A subcommittee of industry members, constituted to advise the Department on complex applications

A subcommittee of the FINRA Board, constituted to decide applications in place of the Department

A subcommittee of the Department's senior staff, constituted to reconsider a decision before it issues

A subcommittee of the National Adjudicatory Council, constituted to review a Department decision

One of the Uniform Registration Forms is replaced by a successor form. How do the definitions that rest on disclosure on the Uniform Registration Forms fare?

They keep working, the Uniform Registration Forms being defined to include the forms as amended and any successors

They lapse as to the replaced form until the rule is amended to name the successor form expressly

They keep working for events disclosed before the replacement, later disclosures falling outside them

They apply to the successor once the Department has published a notice recognising it as equivalent

A person pleaded nolo contendere (no contest) to a criminal charge, and the matter is required to be disclosed on the Uniform Registration Forms. Is it a final criminal matter?

No — a no contest plea admits no guilt, so it cannot stand alongside a conviction or a guilty plea

Yes — a plea of no contest counts on the same footing as a conviction or a plea of guilty

Yes, provided the charge related to investment activity or to the securities business

No — a matter counts when it ends in a conviction after trial, a plea of any kind falling outside it

A final customer arbitration award of $60,000 is made against a member firm over an account a registered representative handled, but the representative was not a named party. Is the award a specified risk event for the representative?

Yes — an award counts against every person who handled the account, whether named in the claim or not

Yes — the award is above the dollar threshold, which is the only condition the definition sets

No — the award and settlement categories reach only matters in which the person was a named party

No — arbitration awards are never specified risk events, the definition reaching regulatory actions

Whom do the admission standards under the Rule 1000 Series evaluate, as the Rule 1011 definitions delimit them?

The Applicant and its customers, whose accounts are sampled to test the proposed business

The Applicant's registered principals, other personnel being reviewed through their own registrations

The Applicant as a firm, individuals being assessed separately when their Form U4 is filed

The Applicant together with its Associated Persons, each as the rule defines them

FINRA Rule 1011: Definitions for the Rule 1000 Series

What Are the Definitions Under FINRA Rule 1011?

FINRA Rule 1011 establishes the operative definitions for the terms specific to the FINRA Rule 1000 Series — the series governing Member Application and Associated Person Registration, commonly referred to as the Membership Application Program (MAP) rules. Unless otherwise provided, terms used in the Rule 1000 Series have the meaning defined in Rule 0160, and Rule 1011 supplies the additional definitions the series relies on. FINRA Rule 1011 provides definitions for a comprehensive set of terms used throughout the Rule 1000 Series.

The rule defines: Applicant; Associated Person; Covered Pending Arbitration Claim; Department; Director; district; district office; final criminal matter; FINRA Board; FINRA Regulation Board; Governor; Interested FINRA Staff; material change in business operations; principal place of business; sales practice event; specified risk event; Subcommittee; and Uniform Registration Forms. The rule was originally adopted as NASD Rule 1011 under the NASD rulebook and transferred into the Consolidated FINRA Rulebook effective May 8, 2019, with subsequent amendments effective September 1, 2021 reflecting the MAP rules amendments approved in Securities Exchange Act Release No. 90635. Associated Regulatory Notices include 21-09.

FINRA Rule 1011 sits within the 1000 Member Application and Associated Person Registration series, immediately following FINRA Rule 1010's electronic filing requirements and immediately preceding FINRA Rule 1012's general provisions.

"Applicant"

FINRA Rule 1011 defines the term Applicant as a person that applies for membership in FINRA under Rule 1013 or a member that files an application for approval of a change in ownership, control, or business operations under Rule 1017. This definition establishes a dual scope for the term — it encompasses both prospective new members seeking to join FINRA for the first time, and existing members seeking approval of changes to their structure or operations significant enough to require a continuing membership application (CMA) under Rule 1017.

The Applicant definition is foundational to the entire Rule 1000 Series because it identifies the party subject to FINRA's membership standards under Rule 1014 — the standards the Department evaluates to determine whether to approve or deny a membership application or CMA. Throughout the Rule 1000 Series, references to the Applicant's obligations, the Department's review, and the procedural rights available — including the right to a membership interview under Rule 1013, the right to request review of a Department decision by the National Adjudicatory Council under Rule 1015, and the FINRA Board's discretionary review of the National Adjudicatory Council's decision under Rule 1016 — all operate with the Applicant as the central party those procedures address.

"Associated Person"

FINRA Rule 1011 defines Associated Person for purposes of the Rule 1000 Series as: (1) a natural person registered under FINRA rules; or (2) a sole proprietor, or any partner, officer, director, branch manager of the Applicant, or any person occupying a similar status or performing similar functions; (3) any company, government or political subdivision or agency or instrumentality of a government controlled by or controlling the Applicant; (4) any employee of the Applicant, except any person whose functions are solely clerical or ministerial; (5) any person directly or indirectly controlling the Applicant whether or not such person is registered or exempt from registration under the FINRA By-Laws or FINRA rules; (6) any person engaged in investment banking or securities business controlled directly or indirectly by the Applicant whether such person is registered or exempt from registration under the FINRA By-Laws or FINRA rules; or (7) any person who will be or is anticipated to be a person described in (1) through (6) above.

This seven-part definition is notably broader than the colloquial understanding of the term — it encompasses not only currently registered individuals but also controlling entities, anticipated future employees, and individuals exercising control over the Applicant regardless of their registration status. This breadth reflects the membership application context — when FINRA evaluates a new membership or CMA application, the fitness assessment under Rule 1014's standards extends to the full range of individuals and entities that will be associated with or exercise control over the Applicant, not merely those who will hold FINRA registrations. The seventh prong — extending the definition to anticipated future persons — ensures FINRA's fitness review covers individuals the Applicant intends to hire or bring into the membership structure following approval.

"Covered Pending Arbitration Claim"

FINRA Rule 1011 defines Covered Pending Arbitration Claim in two contexts. For purposes of business expansions under IM-1011-2 and Rule 1017(a)(6)(B), a Covered Pending Arbitration Claim means an investment-related, consumer-initiated claim filed against an Associated Person in any arbitration forum that is unresolved and whose claim amount (individually or in aggregate if multiple claims) exceeds the hiring member's excess net capital. For purposes of an event described in Rule 1017(a)(6)(A), the definition applies to claims against the transferring member or its Associated Persons with the same unresolved and excess-net-capital threshold, measured against the transferring member's excess net capital.

The definition specifies that claim amount includes claimed compensatory loss amounts only — not requests for pain and suffering, punitive damages, or attorney's fees — and is the maximum amount for which the Associated Person or transferring member is potentially liable regardless of whether the claim was brought against additional persons or whether the Associated Person reasonably expects to be indemnified or share liability.

This definition was added to the Rule 1011 series as part of the MAP Rules Amendment Release (Securities Exchange Act Release No. 88482, March 26, 2020) and is operationally significant because Rule 1017(a)(6) mandates that a member firm seek a materiality consultation from the Department before proceeding with certain expansions or transfers where Covered Pending Arbitration Claims are present.

"Department," "FINRA Board," "FINRA Regulation Board," and "Governor"

FINRA Rule 1011 defines Department as the Department of Member Regulation of FINRA — the specific organizational unit responsible for administering the MAP process, reviewing membership and CMA applications, conducting membership interviews under Rule 1013, and issuing Department decisions under Rule 1014. When Rule 1014 refers to the Department's determination of whether an Applicant meets the standards for admission, the Department so referenced is this same organizational unit.

FINRA Board means the Board of Governors of FINRA. Governor means a member of the FINRA Board. FINRA Regulation Board means the Board of Directors of FINRA Regulation — a board distinct from the FINRA Board itself. The FINRA Board and Governor definitions are significant in the context of Rule 1016, which establishes the FINRA Board's discretionary review authority over decisions of the National Adjudicatory Council issued under Rule 1015, a review that a Governor initiates by calling for it.

"Director," "District," and "District Office"

FINRA Rule 1011 defines Director as a member of the FINRA Regulation Board, district as a district established by the FINRA Regulation Board, and district office as an office of FINRA located in a district. These terms carry practical weight in the membership process because FINRA Rule 1013 provides that, unless the Department and the Applicant otherwise agree, the membership interview is conducted in the district office for the district in which the Applicant has or intends to have its principal place of business, and because the District Director for the relevant district is among the Interested FINRA Staff.

"Interested FINRA Staff"

Interested FINRA Staff means an employee who directly participates in a decision under Rule 1014 or Rule 1017, an employee who directly supervises an employee with respect to such decision, an employee who conducted an investigation or examination of a member that files an application under Rule 1017, the District Director for the relevant district, and the head of the Department. This definition operationalizes the ex parte communication prohibitions that Rule 1012's general provisions establish — identifying precisely which FINRA personnel are subject to those restrictions by virtue of their role in the specific application proceeding.

"Material Change in Business Operations" and "Principal Place of Business"

FINRA Rule 1011 defines material change in business operations as including, but not limited to: removing or modifying a membership agreement restriction; market making, underwriting, or acting as a dealer for the first time; and adding business activities that require a higher minimum net capital under SEA Rule 15c3-1. This non-exhaustive definition establishes the baseline for determining when an existing member must file a CMA under Rule 1017 — a threshold that has practical significance for any member considering expanding or altering its business, since a member that makes such a change without filing the application Rule 1017 requires is out of compliance with that rule.

Principal place of business means the executive office from which the sole proprietor or the officers, partners, or managers of the Applicant direct, control, and coordinate the activities of the Applicant, unless the Department determines that the principal place of business is where: (1) the largest number of Associated Persons are located; or (2) the books and records necessary to provide information and data to operate the business and comply with applicable rules are located. This functional, substance-over-form definition ensures that an Applicant cannot designate a nominal executive office in one location while actually conducting business from another — the Department retains authority to determine the actual principal place of business based on operational realities.

"Sales Practice Event," "Subcommittee," and "Uniform Registration Forms"

Sales practice event means any customer complaint, arbitration, or civil litigation that has been reported to the Central Registration Depository, currently is required to be reported to the Central Registration Depository, or otherwise has been reported to FINRA. This definition is relevant to the Rule 1014(a)(3) fitness standard — when the Department evaluates whether an Applicant and its Associated Persons are capable of complying with applicable standards, sales practice events form a significant category of the background and regulatory history the Department considers.

Subcommittee means a subcommittee of the National Adjudicatory Council constituted pursuant to Rule 1015 to conduct a review of a Department decision issued under the Rule 1000 Series. This definition identifies the body that participates in the first level of review above the Department — when an Applicant seeks review of a Department decision, Rule 1015 provides for that review by the National Adjudicatory Council, which appoints a Subcommittee to participate in the review.

Uniform Registration Forms means the Uniform Application for Broker-Dealer Registration (Form BD), the Uniform Application for Securities Industry Registration or Transfer (Form U4), the Uniform Termination Notice for Securities Industry Registration (Form U5), and the Uniform Disciplinary Action Reporting Form (Form U6), as amended or any successors. This definition is significant because two of the defined terms in Rule 1011 — final criminal matter and specified risk event — are defined by reference to events that are disclosed or required to be disclosed on these forms, making the Uniform Registration Forms definition the anchor for the disclosure framework the Rule 1000 Series relies upon.

"Final Criminal Matter" and "Specified Risk Event" — The September 2021 Amendments

Two definitions added through the September 1, 2021 amendments (approved in Securities Exchange Act Release No. 90635, and announced through Regulatory Notice 21-09) reflect FINRA's initiative to address brokers with a significant history of misconduct.

Final criminal matter means a criminal matter that resulted in a conviction of, or plea of guilty or nolo contendere (no contest) by, a person that is disclosed, or is or was required to be disclosed, on the applicable Uniform Registration Forms.

Specified risk event means any one of the following events disclosed, or required to be disclosed, on the applicable Uniform Registration Forms: (1) a final investment-related, consumer-initiated customer arbitration award or civil judgment against the person for fifteen thousand dollars or more in which the person was a named party; (2) a final investment-related, consumer-initiated customer arbitration settlement or civil litigation settlement for fifteen thousand dollars or more in which the person was a named party; (3) a final investment-related civil action where (A) the total monetary sanctions were ordered for fifteen thousand dollars or more, or (B) the sanction was a bar, expulsion, revocation, or suspension; and (4) a final regulatory action where (A) the total monetary sanctions were ordered for fifteen thousand dollars or more, or (B) the sanction was a bar, expulsion, rescission, revocation, or suspension from associating with a member.

These two definitions operationalize Rule 1017(a)(7) — the provision requiring a mandatory materiality consultation when a natural person with, in the prior five years, one or more final criminal matters or two or more specified risk events seeks to become an owner, control person, principal, or registered person of a member firm. Together they represent the key threshold criteria for FINRA's enhanced scrutiny program for brokers with a significant history of misconduct.

Connection to FINRA Rules 1010, 1012, 1013, 1014, 1015, 1016, and 1017

FINRA Rule 1011 connects to FINRA Rule 1010 — the electronic filing requirements for uniform forms, which immediately precede Rule 1011 in the series and concern the same family of forms that Rule 1011 defines as the Uniform Registration Forms. It connects to FINRA Rule 1012 — whose ex parte communication prohibitions apply to Interested FINRA Staff as Rule 1011 defines the term. It connects to FINRA Rule 1013 — which provides for the membership interview in the district office for the district in which the Applicant has or intends to have its principal place of business, terms Rule 1011 defines. It connects to FINRA Rule 1014 — whose standards for admission evaluate the Applicant and its Associated Persons, and whose fitness standard in paragraph (a)(3) turns in part on whether an Applicant's or Associated Person's record reflects a sales practice event. It connects to FINRA Rule 1015 — which provides for review of Department decisions by the National Adjudicatory Council and its Subcommittee. It connects to FINRA Rule 1016 — which provides for the FINRA Board's discretionary review, initiated by a Governor. And it connects to FINRA Rule 1017 — whose material change in business operations, Covered Pending Arbitration Claim, final criminal matter, and specified risk event triggers all use Rule 1011 definitions as their operative thresholds.

Examination Relevance and Key Takeaways

FINRA Rule 1011 is the definitions rule for the membership application and associated person registration framework, and its terms must be understood to read the rest of the Rule 1000 Series. Securities professionals involved in firm formation, changes in ownership or control, or membership compliance should know how its key terms operate.

The key points to retain are these: FINRA Rule 1011 defines Applicant as both a new membership applicant and an existing member seeking CMA approval; defines Associated Person broadly across seven categories encompassing registered persons, controlling entities, employees, and anticipated future persons; defines Covered Pending Arbitration Claim by reference to unresolved consumer-initiated investment-related claims exceeding the hiring or transferring member's excess net capital; defines Department as the Department of Member Regulation; defines Interested FINRA Staff to operationalize ex parte communication restrictions; defines material change in business operations as the threshold triggering Rule 1017 CMA requirements; defines sales practice event as any customer complaint, arbitration, or civil litigation reported to the CRD or FINRA; defines Subcommittee as the NAC subcommittee constituted under Rule 1015 to conduct reviews; defines Uniform Registration Forms as Form BD, Form U4, Form U5, and Form U6; defines final criminal matter as a conviction or guilty/nolo contendere plea disclosed on Uniform Registration Forms; and defines specified risk event as final customer awards, settlements, civil actions, or regulatory actions of fifteen thousand dollars or more (or resulting in bar/expulsion/revocation/suspension), with two or more such events in five years triggering the Rule 1017(a)(7) mandatory materiality consultation requirement.