Table of Contents
SERIES 24 | FINANCIAL REGULATION COURSES
FINRA Rule 9345 consists of a single mandatory sentence: a Subcommittee or, if applicable, an Extended Proceeding Committee, shall present a recommended decision in writing to the National Adjudicatory Council before the meeting of the National Adjudicatory Council at which the disciplinary proceeding shall be considered.
Despite its brevity — the shortest substantive rule in the 9340 Proceedings subsection — FINRA Rule 9345 performs a foundational structural function in FINRA's appellate review system. It creates the mandatory written recommended decision that bridges the Subcommittee's substantive appellate review work and the full NAC's formal consideration and final determination under FINRA Rule 9349.
The recommended decision is the analytical document that the full NAC receives, reviews, and uses as its primary input into deliberations — the Subcommittee's complete assessment of the record, the legal standards, and the appropriate disposition that the full NAC must consider before exercising its own independent authority under FINRA Rule 9348.
FINRA Rule 9345 sits within the 9340 Proceedings subsection of the 9300 Review of Disciplinary Proceeding series as the final rule of that subsection — the culminating output rule that follows the appellate proceedings rules governing oral argument, failure to appear, paper-only disposition, and failure to participate or abandon. It was adopted by SR-NASD-97-28 effective August 7, 1997, amended by SR-NASD-97-81 effective January 16, 1998, and last amended by SR-FINRA-2008-021 effective December 15, 2008. One selected notice is associated with the rule — 08-57.
The mandatory shall formulation of FINRA Rule 9345 confirms that the Subcommittee's written recommended decision is not optional — it is a required procedural step in every appeal or call for review that has not been dismissed or withdrawn.
A Subcommittee that conducts oral argument under FINRA Rule 9341, receives written briefing under FINRA Rule 9347, and reviews the record under FINRA Rule 9346 must translate all of that analytical work into a written document presented to the full NAC before the NAC meeting at which the proceeding is considered.
There is no mechanism through which the Subcommittee may bypass FINRA Rule 9345 and present its analysis orally at the NAC meeting alone — the writing requirement is absolute.
The before the meeting timing requirement establishes the relationship between the Subcommittee's work and the full NAC's formal consideration.
The recommended decision must exist as a complete written document in the NAC's possession before the NAC meeting convenes to consider the case. This pre-meeting submission gives NAC members who were not on the Subcommittee — and therefore did not review the record, attend the oral argument, or participate in the Subcommittee's deliberations — the opportunity to read and assess the Subcommittee's analysis before the meeting. The full NAC's consideration under FINRA Rule 9349 is a meaningful exercise of independent appellate authority only if NAC members have access to the Subcommittee's complete written analysis in advance.
FINRA Rule 9345 itself does not specify the content requirements for the recommended decision — the rule simply requires that a written recommended decision be presented before the NAC meeting.
The content emerges from the Subcommittee's appellate review function as defined in FINRA Rule 9331(b) and from the NAC's formal consideration function under FINRA Rule 9349. The recommended decision must address all issues presented in the appeal or review with sufficient analytical depth to enable the full NAC to assess the Subcommittee's reasoning and exercise its own independent judgment on each contested issue.
A complete recommended decision typically addresses several core components. The factual findings component assesses whether the Hearing Panel's findings of fact are supported by substantial evidence in the record as a whole — the standard of review for factual questions in FINRA appellate proceedings.
The legal analysis component assesses de novo whether the Hearing Panel's legal conclusions are correct — applying the applicable rule texts, regulatory guidance, SEC interpretations, and NAC precedents to the found facts.
The sanction analysis component assesses whether the sanctions imposed are consistent with the March 2024 Sanction Guidelines' principal considerations, aggravating and mitigating factors, and sanction ranges, or whether the sanctions should be affirmed, modified, increased, or reduced. The recommendation component states the Subcommittee's ultimate recommended disposition — affirm, dismiss, modify, reverse, remand — and the recommended sanctions if appropriate.
FINRA Rule 9349 expressly refers to the written recommended decision of the Subcommittee or Extended Proceeding Committee when describing the full NAC's formal consideration — confirming that the recommended decision is a mandatory input into FINRA Rule 9349's deliberative process. The NAC considers all matters presented in the appeal or review and the written recommended decision before exercising its independent authority under FINRA Rule 9348.
FINRA Rule 9345's recommended decision mechanism creates a distinctive two-tier deliberative structure that characterizes FINRA's appellate review system. At the first tier, the Subcommittee — a small working group of two or more NAC members or eligible former members who have reviewed the complete record, attended oral argument, and deliberated among themselves — produces a detailed written analysis. At the second tier, the full NAC — whose fifteen members include many who did not serve on the Subcommittee and have not independently reviewed the complete record — receives the Subcommittee's written analysis and exercises its own independent appellate authority.
This two-tier structure serves complementary institutional purposes. The Subcommittee provides the depth — the granular analytical work that only a small group with full record immersion can perform efficiently. The full NAC provides the breadth — the institutional perspective, consistency enforcement, and collective judgment that the full body's deliberations produce. FINRA Rule 9349's formal consideration process, which explicitly invokes the Subcommittee's recommended decision alongside all other presented matters, ensures that the full NAC's broader perspective is informed by — but not bound by — the Subcommittee's granular analysis.
The NAC's authority under FINRA Rule 9348 to affirm, dismiss, modify, or reverse any finding and to affirm, modify, reverse, increase, or reduce any sanction is exercised independently of the Subcommittee's recommendation. The full NAC may accept the Subcommittee's recommendation in its entirety, modify it in specific respects, reject it and reach different conclusions on any issue, or remand the case with different instructions than the Subcommittee recommended. Published NAC decisions document both the Subcommittee's recommended disposition and the full NAC's final determination — and cases in which the full NAC departures from the Subcommittee's recommendation provide important insight into the dynamics of FINRA's two-tier appellate structure.
FINRA Rule 9331's appointment rule — which governs the Subcommittee's constitution and analytical function — specifically frames the Subcommittee's role as subject to FINRA Rule 9345. FINRA Rule 9331(a)'s appointment mandate provides that the Subcommittee participates in the disciplinary proceeding subject to Rule 9345 — a cross-reference that establishes the recommended decision requirement as the defining output obligation of the Subcommittee's participation. Similarly, FINRA Rule 9331(b)'s description of the Subcommittee's hearing and record review function culminates in the obligation to prepare a recommended decision pursuant to FINRA Rule 9345. The two rules work together: FINRA Rule 9331 defines the Subcommittee's analytical process, and FINRA Rule 9345 defines its required output.
FINRA Rule 9345 connects to FINRA Rule 9331 — whose Subcommittee appointment and analytical function provisions establish the recommended decision as the Subcommittee's required output. It connects to FINRA Rules 9341 and 9343 — which govern the oral argument and paper-only review processes that produce the Subcommittee's analytical inputs. It connects to FINRA Rule 9346 — whose evidence provisions govern what materials the Subcommittee considers in preparing its recommended decision. It connects to FINRA Rule 9347 — whose briefing provisions govern the written advocacy that the Subcommittee reviews. It connects to FINRA Rule 9348 — which defines the NAC's independent authority that operates on the Subcommittee's recommended decision as its primary input. And it connects to FINRA Rule 9349 — which governs the NAC's formal consideration process that explicitly incorporates the FINRA Rule 9345 recommended decision as a mandatory input into the full NAC's deliberations.
FINRA Rule 9345 is tested on the Series 24 General Securities Principal examination as the recommended decision rule — the provision that creates the mandatory written analytical bridge between the Subcommittee's substantive review work and the full NAC's formal consideration and final determination.
The key points to retain are these: FINRA Rule 9345 requires that a Subcommittee or Extended Proceeding Committee shall present a recommended decision in writing to the National Adjudicatory Council before the NAC meeting at which the disciplinary proceeding is considered — the obligation is mandatory and the writing requirement is absolute; the recommended decision is the analytical output of the Subcommittee's complete appellate review including record review, oral argument consideration if held, and deliberation on the merits; the recommended decision typically addresses factual findings, legal analysis, sanction assessment, and the recommended ultimate disposition; the before-the-meeting timing requirement enables full NAC members who did not serve on the Subcommittee to review and assess the recommended decision's reasoning before the formal consideration meeting; FINRA Rule 9349 explicitly references the written recommended decision as a mandatory input into the NAC's formal consideration alongside all other matters presented in the appeal; the full NAC exercises independent authority under FINRA Rule 9348 — it may accept, modify, or reject the Subcommittee's recommendation on any issue; FINRA Rule 9331's appointment provisions frame the Subcommittee's role as subject to FINRA Rule 9345 — establishing the recommended decision as the defining output obligation; and the rule was adopted in 1997 and last amended December 15, 2008 through SR-FINRA-2008-021 completing the 9340 Proceedings subsection.
