FINRA Rule 9346

FINRA Rule 9346(a): The Default Limitation on Review Materials

FINRA Rule 9346(a) establishes the fundamental principle of appellate evidence law as applied in FINRA proceedings — the NAC's review is limited to the record as it existed at the first-level proceeding, supplemented only by the parties' appellate advocacy materials. The NAC's review shall be limited to consideration of the record as defined in FINRA Rule 9267, supplemented by briefs and other papers submitted to the Subcommittee or Extended Proceeding Committee and the NAC in connection with the appeal, cross-appeal, or call for review.

The FINRA Rule 9267 record encompasses the complete documentary and testimonial record of the OHO proceeding — all pleadings, transcripts, admitted evidence, motions, rulings, post-hearing briefs, and the Hearing Panel decision. This is the foundation of appellate review. The supplemental briefs and papers encompass the parties' appellate briefs filed pursuant to FINRA Rule 9347, any supplemental briefing ordered by Counsel to the NAC under FINRA Rule 9313(a)(7), and any other papers submitted in connection with the specific appeal. Together the record and supplemental materials constitute everything the NAC may consider in a standard appellate review.

The rationale for limiting appellate review to the OHO record is the same principle that grounds appellate review in federal courts and administrative proceedings generally — the role of an appellate body is to assess whether the first-level decision-maker correctly applied the law to the facts presented at the first level, not to conduct a new trial on a different or expanded factual record. If parties could introduce new evidence freely on appeal, every NAC review would become a de novo proceeding — defeating the purpose of having a first-level hearing and transforming the Hearing Panel from a decision-maker into a mere preliminary step. The record limitation confines the NAC's review to its appropriate appellate role.

The extraordinary circumstances exception — the introductory except as otherwise set forth in this paragraph — is the narrow escape valve from this general limitation, addressed in FINRA Rule 9346(b).

FINRA Rule 9346(b): The Extraordinary Circumstances Exception

FINRA Rule 9346(b) establishes the exception under which a party may introduce additional evidence not in the OHO record in NAC appellate proceedings. The exception is deliberately narrow — parties may introduce additional evidence only with prior approval of the Subcommittee, Extended Proceeding Committee, or NAC, and only upon a showing that extraordinary circumstances exist.

The procedural vehicle for seeking additional evidence admission is a motion filed no later than thirty days after OHO transmits the record index to the NAC pursuant to FINRA Rule 9321. This thirty-day window begins when the parties receive the record index — giving them a defined period to assess the record's completeness and identify any genuinely new evidence that was not available at the OHO proceeding. The motion must describe each item of proposed new evidence, demonstrate good cause for failing to introduce it below, and demonstrate why its introduction is material to the determination of the appeal.

The extraordinary circumstances standard is substantively demanding. Evidence that was available at the OHO proceeding but not introduced — through strategic choice, poor preparation, or simple oversight — does not constitute extraordinary circumstances. Evidence that was known to exist but whose relevance was not recognized at the time of the OHO proceeding similarly does not qualify. Extraordinary circumstances typically involve evidence that did not exist at the time of the OHO proceeding and that is genuinely material to the issues on appeal — for example, newly discovered documentary evidence that directly contradicts a key factual finding, or newly available testimony from a witness whose existence was unknown during the OHO proceeding.

The connection to FINRA Rule 9344(a)'s good cause provision creates an important exception within the exception. When an appealing party shows good cause for failure to participate in the OHO proceeding below, the NAC may hear evidence pursuant to FINRA Rule 9344(a) — effectively treating the appeal as an opportunity to develop the first-level record that the party failed to develop through non-participation. This FINRA Rule 9344(a) good cause pathway is substantively distinct from the FINRA Rule 9346(b) extraordinary circumstances pathway — it applies specifically to parties who defaulted or failed to participate below, not to parties who participated but simply failed to introduce certain evidence.

The Review Standards Embedded in FINRA Rule 9346

FINRA Rule 9346's limitation on review materials is directly connected to the standards of review the NAC applies to different types of appellate issues. For factual findings — the category most directly dependent on the record — the NAC applies a substantial evidence in the record as a whole standard. This standard asks whether the Hearing Panel's factual conclusions are supported by sufficient evidence in the OHO record that a reasonable trier of fact could reach those conclusions. Because the substantial evidence standard is applied to the OHO record as defined in FINRA Rule 9267, FINRA Rule 9346's record limitation is essential to the integrity of the factual review standard — the NAC cannot assess substantial evidence support if it considers evidence not in the OHO record.

For legal conclusions — the category determined by applying legal standards rather than weighing evidence — the NAC applies a de novo standard of review. Legal questions are reviewed without deference to the Hearing Panel's legal analysis. Because legal analysis is not evidence-dependent in the same direct way as factual findings, the FINRA Rule 9346 record limitation is less critical to the integrity of de novo legal review — but it remains relevant to the extent that legal conclusions rest on factual predicates that are themselves supported by the record.

FINRA Rule 9346 and FINRA Rule 9348's Powers on Review

FINRA Rule 9346's evidentiary limitation operates in conjunction with FINRA Rule 9348's powers of the NAC on review. FINRA Rule 9348 grants the NAC broad authority to affirm, dismiss, modify, or reverse any finding, and to affirm, modify, reverse, increase, or reduce any sanction. But this broad authority is exercised within the evidentiary framework that FINRA Rule 9346 establishes — the NAC's modifications and reversals must be grounded in the OHO record, not in evidence that never appeared in the first-level proceeding. A NAC decision that reverses a Hearing Panel finding based on evidence outside the FINRA Rule 9267 record would exceed the evidentiary framework of FINRA Rule 9346 and potentially the jurisdictional scope of the appellate review.

Connection to FINRA Rules 9267, 9321, 9331, 9343, 9344, 9345, 9347, and 9348

FINRA Rule 9346 connects to FINRA Rule 9267 — whose official record definition establishes the primary evidentiary foundation of NAC review. It connects to FINRA Rule 9321 — whose thirty-day index transmission deadline starts the clock for additional evidence motions under FINRA Rule 9346(b). It connects to FINRA Rule 9331 — whose Subcommittee review function is conducted within the evidentiary framework that FINRA Rule 9346 establishes. It connects to FINRA Rule 9343 — whose paper-only disposition provision specifically cross-references FINRA Rule 9346 as one of the two rules governing the materials available for consideration. It connects to FINRA Rule 9344 — whose FINRA Rule 9344(a) good cause provision creates a specific additional evidence pathway for parties who failed to participate below. It connects to FINRA Rule 9345 — whose recommended decision is grounded in the FINRA Rule 9346 record. It connects to FINRA Rule 9347 — whose briefing provisions govern the supplemental papers that FINRA Rule 9346(a) permits alongside the official record. And it connects to FINRA Rule 9348 — whose powers of the NAC on review must be exercised within the evidentiary framework that FINRA Rule 9346 establishes.

Examination Relevance and Key Takeaways

FINRA Rule 9346 is tested on the Series 24 General Securities Principal examination as the NAC appellate evidence rule — establishing what the NAC may and may not consider in reviewing a Hearing Panel decision.

The key points to retain are these: FINRA Rule 9346(a) limits the NAC's review to the official record as defined in FINRA Rule 9267 supplemented by briefs and papers submitted in connection with the appeal — the NAC does not conduct a de novo trial on a new or expanded factual record; FINRA Rule 9346(b) creates a narrow exception allowing additional evidence only with prior Subcommittee or NAC approval upon a showing of extraordinary circumstances — evidence available at but not introduced during the OHO proceeding does not qualify as extraordinary circumstances; a motion for additional evidence must be filed within thirty days after OHO transmits the record index to the NAC under FINRA Rule 9321; the motion must describe each proposed item, demonstrate good cause for failing to introduce it below, and demonstrate its materiality to the appeal; when an appealing party shows good cause for failure to participate below under FINRA Rule 9344(a) the NAC may hear evidence under that provision — a distinct pathway from the FINRA Rule 9346(b) extraordinary circumstances exception; the record limitation is directly tied to the NAC's substantial evidence standard of review for factual findings — the NAC assesses whether findings are supported by the OHO record as a whole; FINRA Rule 9346's evidentiary framework bounds the exercise of FINRA Rule 9348's broad powers on review; and the rule was adopted in 1997 and last amended December 15, 2008 through SR-FINRA-2008-021.