FINRA Rule 1015

FINRA Rule 1015(a): Filing the Request for Review — The 25-Day Window and Specificity Requirement

FINRA Rule 1015(a)(1) establishes the Applicant's right to seek NAC review and its procedural prerequisites — an Applicant that receives an adverse Department decision under FINRA Rule 1014 may file a written request for review with FINRA within 25 days after service of that decision. The request must: (A) specify the grounds upon which the Applicant is seeking review, stating specifically why the Department's decision is inconsistent with the applicable standards of FINRA Rule 1014 or otherwise should be set aside; and (B) state whether a hearing is requested.

The dual specificity requirement — grounds for review and whether a hearing is requested — serves important procedural functions. The grounds requirement ensures the Subcommittee and Department enter the review process with a clear understanding of what the Applicant contends the Department got wrong, enabling focused preparation and preventing dilatory filings that merely invoke the review right without articulating any reviewable basis. The hearing-request statement enables FINRA to schedule proceedings appropriately from the outset rather than learning mid-process whether an oral hearing will be required.

The 25-day window runs from the date of service of the Department's decision, computed under FINRA Rule 1012's time-computation provisions — excluding the date of service itself and extending through the next business day if the 25th day falls on a weekend or FINRA holiday. An Applicant that fails to file within 25 days of service forfeits the right to NAC review — no tolling occurs for informal engagement with the Department during this period.

FINRA Rule 1015(a)(2) requires the Applicant's request for review to be filed in the manner specified in FINRA Rule 1012 — now fully electronic following the Regulatory Notice 22-16 amendments that eliminated the simultaneously-filed first-class-mail copy requirement to the district office.

FINRA Rule 1015(b) and (c): Transmission of the Record and Written Briefs

FINRA Rule 1015(b) requires the Department, promptly upon receipt of a timely filed request for review, to: (1) transmit to the NAC copies of all documents that were considered in connection with the Department's decision, together with an index to those documents; and (2) serve on the Applicant a copy of all such documents other than those originally submitted by the Applicant, together with a copy of the index. The Department must also promptly record in FINRA's membership application docket each request for review filed and each material subsequent event, filing, and change in the proceeding's status — ensuring a complete administrative record that any subsequent reviewing body (the FINRA Board under Rule 1016, or the SEC under Rule 1019) can rely upon.

FINRA Rule 1015(c) establishes the briefing framework — the Applicant and the Department may each submit written briefs and other materials addressing the grounds for and against review. The Subcommittee or NAC may at any time during its consideration direct either party to file additional information or briefs, with any such additional material provided to all parties before the NAC renders its decision. This dynamic briefing authority — extending throughout the proceeding rather than being fixed at a single deadline — gives the reviewing body the flexibility to seek targeted additional submissions on specific questions without requiring the parties to anticipate every potential issue in their initial briefs.

FINRA Rule 1015(d): Dismissal for Abandonment and Good Cause Relief

FINRA Rule 1015(d)(1) establishes the grounds for dismissal of a request for review as abandoned — if an Applicant: (A) fails to specify the grounds for its request for review under paragraph (a)(1); (B) fails to appear at a hearing for which it has notice; or (C) fails to file information or briefs as directed, the NAC or Subcommittee may dismiss the request for review as abandoned.

FINRA Rule 1015(d)(2) establishes the consequence of such dismissal — the Department's decision becomes the final action of FINRA upon dismissal. This consequence is significant — a dismissal for abandonment produces the same outcome as if the Applicant had never appealed at all, with the Department's adverse decision becoming final and immediately operative.

FINRA Rule 1015(d)(3) provides a limited safety valve — upon a showing of good cause, the NAC or Subcommittee may withdraw a dismissal entered under this paragraph. This good-cause-withdrawal mechanism prevents dismissal from operating as an irrevocable forfeiture where an Applicant's failure to prosecute its appeal was attributable to circumstances beyond its control — but the good cause requirement ensures this relief is reserved for genuine exceptional circumstances rather than routine instances of inattention or delay.

FINRA Rule 1015(e): The Subcommittee — Appointment and Composition

FINRA Rule 1015(e) establishes the specific body that conducts the review within the NAC structure — upon receipt of a request for review, the Chair of the NAC pursuant to FINRA Rule 9120 shall appoint a Subcommittee to participate in the review. The Subcommittee shall be composed of two or more persons who shall be current or past members of the National Adjudicatory Council or former Directors or Governors.

This composition requirement — current or past NAC members or former Directors or Governors — ensures the Subcommittee brings substantial securities industry regulatory experience to its review function. The minimum two-person requirement prevents a single individual from constituting the reviewing body at this stage, while the current-or-past-NAC-member-or-former-Director-or-Governor qualification ensures all Subcommittee members have either direct NAC experience or Board-level governance experience relevant to evaluating the Department's membership decision.

FINRA Rule 1015(f): The Hearing — Timing, Notice, Procedures, and Evidence Rules

FINRA Rule 1015(f)(1) establishes the hearing's timing requirement — if a hearing is requested by the Applicant under paragraph (a)(1)(B) or directed by the Subcommittee, the hearing shall be held within 45 days after the filing of the request with the NAC or service of the Subcommittee's hearing notice. This 45-day window imposes a meaningful pace on the hearing process — ensuring that Applicants who request hearings receive them promptly rather than facing indefinite delay while awaiting scheduling. The NAC must serve written notice of the hearing date and time on the Applicant by electronic mail, facsimile, or overnight courier not later than 14 days before the hearing — providing adequate preparation time while maintaining the proceeding's overall forward momentum.

FINRA Rule 1015(f)(2) establishes the hearing's procedural framework. Both the Applicant and the Department may be represented by counsel. Formal rules of evidence shall not apply — the Subcommittee evaluates all evidence presented under a reasonableness standard, without the exclusionary rules that govern judicial proceedings. Not later than five days before the hearing, the Applicant and the Department must exchange copies of their proposed hearing exhibits and witness lists and provide copies to the NAC — a pre-hearing exchange requirement that prevents surprise and enables the Subcommittee and the opposing party to evaluate the evidence in advance. If either party fails to provide its exhibits or witness list within this five-day window, the Subcommittee shall exclude the evidence or witnesses from the hearing, subject to a showing of good cause for the failure.

A transcript of the hearing shall be available for purchase from the court reporter at prescribed rates. Either the Applicant, the Department, or a witness may seek to correct the transcript — submitting a proposed correction to the Subcommittee within a reasonable period the Subcommittee prescribes, with the Subcommittee able to direct corrections as requested or sua sponte upon notice to all parties.

FINRA Rule 1015(g): The Subcommittee's Recommended Decision — The 60-Day Timeline

FINRA Rule 1015(g) establishes the timing and content requirements for the Subcommittee's recommended decision — the Subcommittee shall present a recommended decision in writing to the NAC within 60 days after the date of the hearing, and not later than seven days before the meeting of the NAC at which the membership proceeding shall be considered.

The dual deadline — 60 days post-hearing and 7 days pre-NAC-meeting — ensures both that the Subcommittee deliberates within a defined timeframe and that NAC members have adequate advance notice of the recommended decision before they must consider and vote on it. The seven-day-before-NAC-meeting requirement reflects the deliberative body's need for meaningful review time, connecting to the same principle that underlies exhibit exchange requirements, briefing deadlines, and hearing notices throughout the MAP process.

FINRA Rule 1015(h): NAC Consideration — The Affirm, Modify, Reverse, or Remand Framework

FINRA Rule 1015(h)(1) establishes the NAC's decision authority — after considering all matters presented in the review and the Subcommittee's recommended written decision, the NAC may affirm, modify, or reverse the Department's decision, or remand the membership proceeding with instructions. This four-option framework — affirm, modify, reverse, or remand — provides the NAC the full range of outcomes necessary to do justice to the particular record before it.

Affirm preserves the Department's decision unchanged — where the NAC finds the Department correctly applied the Rule 1014(a) standards to the facts of record, affirmance confirms the Department's determination. Modify permits adjustment without full reversal — where the NAC finds, for example, that the Department's denial was correct in principle but that the specific restrictions imposed in a conditional grant were excessive or insufficiently tailored to the identified deficiencies, modification enables a more precisely calibrated outcome. Reverse overturns the Department's decision entirely — granting an application the Department denied, or removing restrictions the Department imposed without adequate justification. Remand returns the proceeding to the Department or the Subcommittee for further consideration under the NAC's specified instructions — appropriate where the NAC identifies a deficiency in the record or analysis that prevents it from resolving the question directly.

FINRA Rule 1015(h)(2): The NAC's Proposed Written Decision — Content Requirements

FINRA Rule 1015(h)(2) establishes the required content of the NAC's proposed written decision — the NAC shall prepare a proposed written decision that includes: (A) a description of the membership application; (B) a summary of the evidence; (C) findings of fact and conclusions regarding the applicable standards in Rule 1014; and (D) a statement whether the Department's decision is affirmed, modified, or reversed, and a rationale therefor that references the applicable standards in Rule 1014.

These four required elements collectively ensure that the NAC's decision is not merely a conclusion but a reasoned determination that the parties — and any subsequent reviewer, whether the FINRA Board under Rule 1016 or the SEC under Rule 1019 — can meaningfully evaluate. The requirement that the rationale reference the applicable standards in Rule 1014 directly connects the NAC's decision to the substantive admission framework, preventing the NAC from affirming or reversing without explaining precisely which of the fourteen Rule 1014(a) standards it found met or unmet, and why.

FINRA Rule 1015(i) and (j): Effectiveness and Transmission to the FINRA Board

FINRA Rule 1015(i) addresses the effectiveness of the Department's decision during the NAC's review — the Department's decision remains in effect throughout the pendency of the NAC review unless the Subcommittee or NAC otherwise directs. This no-stay-by-default principle means an Applicant cannot simply file a review request and then operate as though the Department's restrictions or denial were suspended — the Department's decision controls until superseded by the NAC's own final determination.

FINRA Rule 1015(j) requires the NAC to provide its proposed written decision to the FINRA Board, which may then call the membership proceeding for review pursuant to FINRA Rule 1016. The seven-day-before-NAC-meeting deadline for the Subcommittee's recommended decision under paragraph (g) is designed to allow the FINRA Board adequate time to consider whether to exercise its Rule 1016 discretionary review authority before the NAC's proposed decision becomes final — connecting the Rule 1015 process to the Rule 1016 Governor-call mechanism in a sequenced, coordinated framework.

Connection to FINRA Rules 1011, 1012, 1014, 1016, and 1019

FINRA Rule 1015 connects directly to FINRA Rule 1011 — whose definitions of Subcommittee (as a subcommittee of the NAC constituted pursuant to Rule 1015), FINRA Board, and Governor all find their operational expression in the Rule 1015 review process. It connects to FINRA Rule 1012 — which establishes that the ex parte communication prohibitions become effective when FINRA staff has knowledge that an Applicant intends to file a Rule 1015 request, and whose time-computation provisions govern the 25-day filing window, five-day exhibit exchange, fourteen-day hearing notice, and other Rule 1015 deadlines. 

It connects directly to FINRA Rule 1014 — as the adverse Department decision whose correctness Rule 1015's review is designed to assess, with the same fourteen standards for admission providing the substantive framework for the Subcommittee's and NAC's review as they did for the Department's original decision. It connects to FINRA Rule 1016 — as the next level of review available after the NAC issues its proposed written decision, through a Governor's discretionary call for FINRA Board review within 15 days of the Governor's receipt of the NAC's proposed decision. And it connects to FINRA Rule 1019 — as the SEC review mechanism available after FINRA has taken final action under Rules 1015 and 1016.

Examination Relevance and Key Takeaways

FINRA Rule 1015 is tested on the Series 24 examination as the NAC review pathway for adverse Department membership decisions — the first level of appellate review within the MAP process.

The key points to retain are these: FINRA Rule 1015(a) requires a written request for review specifying the grounds and stating whether a hearing is requested, filed within 25 days of service of the Department's adverse Rule 1014 decision; FINRA Rule 1015(b) requires the Department to promptly transmit the complete record to the NAC and serve non-Applicant documents on the Applicant; FINRA Rule 1015(c) permits written briefs from both parties with the Subcommittee and NAC able to direct additional submissions at any time; FINRA Rule 1015(d) permits dismissal for abandonment where the Applicant fails to specify grounds, appear at a noticed hearing, or file directed briefs — with the Department's decision becoming final upon dismissal, subject to good-cause-based withdrawal of the dismissal; FINRA Rule 1015(e) requires a Subcommittee of two or more current or past NAC members or former Directors or Governors.

FINRA Rule 1015(f) requires a hearing within 45 days of filing (if requested or directed), with 14-day prior written notice, no formal rules of evidence, five-day pre-hearing exhibit and witness list exchange with exclusion for non-compliance, and a purchasable transcript; FINRA Rule 1015(g) requires the Subcommittee's recommended written decision within 60 days of the hearing and no later than seven days before the NAC meeting at which the proceeding will be considered.

FINRA Rule 1015(h) authorizes the NAC to affirm, modify, reverse, or remand the Department's decision, with a required proposed written decision containing a description of the application, summary of evidence, findings of fact and conclusions regarding Rule 1014 standards, and a reasoned statement of the outcome with Rule 1014 standard references; and the Department's decision remains in effect during review unless the Subcommittee or NAC directs otherwise.