FINRA Rule 9349

The rule further provides for the preparation of a proposed written decision, its service on the parties and member firms employing respondents, its status as final FINRA disciplinary action if not called for FINRA Board review, its potential remand, and the email service authority added by the August 2022 amendment. 

Together these provisions close the loop between the Subcommittee's analytical work and the full NAC's institutional judgment — producing the written decision that either concludes FINRA's internal appellate process or advances to FINRA Board discretionary review under FINRA Rule 9351.

FINRA Rule 9349 sits within the 9300 Review of Disciplinary Proceeding series as a free-standing rule. It was adopted by SR-NASD-97-28 effective August 7, 1997, amended multiple times through SR-FINRA-2008-021 effective December 15, 2008, amended by SR-FINRA-2015-019 effective November 2, 2015 as announced in Regulatory Notice 15-35 — adding PCDO-specific provisions — and most recently amended by SR-FINRA-2022-009 effective August 22, 2022 as announced in Regulatory Notice 22-16 — permanently adding email service authority for NAC decisions. Three selected notices are associated — 08-57, 15-35, and 22-16.

FINRA Rule 9349(a): The NAC's Decision Including Remand

FINRA Rule 9349(a) establishes the NAC's formal consideration standard and its dispositional authority. In an appeal or review proceeding not withdrawn or dismissed prior to a decision on the merits, the NAC — after considering all matters presented in the appeal or review and the written recommended decision of the Subcommittee or Extended Proceeding Committee — may affirm, dismiss, modify, or reverse the Hearing Panel or Extended Hearing Panel decision with respect to each respondent who has appealed, cross-appealed, or is subject to a call for review. 

The NAC may affirm, modify, reverse, increase, or reduce any sanction, or impose any other fitting sanction. Alternatively, the NAC or Review Subcommittee may remand the disciplinary proceeding with instructions.

Three features of FINRA Rule 9349(a) deserve specific attention.

First, the not withdrawn or dismissed predicate — only proceedings that have not been resolved before a merits decision are subject to FINRA Rule 9349. 

An appeal dismissed as abandoned under FINRA Rule 9344(b) does not reach FINRA Rule 9349's formal consideration. An appeal withdrawn by the parties before the NAC issues a merits decision does not reach FINRA Rule 9349. Only proceedings where the NAC actually decides the merits on the record proceed through FINRA Rule 9349's full consideration framework.

Second, the after considering all matters presented formulation — the NAC considers both the record and supplemental materials of the appeal under FINRA Rule 9346 and the Subcommittee's written recommended decision under FINRA Rule 9345. The formal consideration is not limited to the Subcommittee's recommendation — the full NAC may reach its own independent conclusions on any issue presented in the appeal, potentially departing from the Subcommittee's recommended disposition on any finding or sanction.

Third, the respondent-specific scope — the NAC's authority extends only with respect to each respondent who has appealed, cross-appealed, or is subject to a call for review. A respondent who did not appeal, was not cross-appealed against, and is not subject to a NAC call for review is not affected by the NAC's determination — their Hearing Panel decision remains the final FINRA disciplinary action as to them. This respondent-specific limitation ensures that the appellate process does not inadvertently alter the outcomes for non-participating respondents.

FINRA Rule 9349(b): The Proposed Written Decision Framework

FINRA Rule 9349(b) governs the preparation and finality of the NAC's written decision. The NAC shall prepare a proposed written decision and provide it to the FINRA Board. If the FINRA Board does not call the disciplinary proceeding for review under FINRA Rule 9351, the proposed written decision becomes final and constitutes the final disciplinary action of FINRA for purposes of SEA Rule 19d-1(c)(1).

The proposed decision status — rather than immediate final decision status — reflects the two-tier institutional review structure that FINRA Rule 9351 creates. The NAC prepares its decision as a proposed decision specifically to give the FINRA Board the opportunity to review it before it becomes final. The Board's call-for-review period under FINRA Rule 9351 creates the window during which the proposed decision is subject to potential Board review. Only after that window expires without a Board call — or after the Board calls the decision and issues its own determination under FINRA Rule 9351 — does the decision achieve finality.

This proposed-then-final structure is analogous to the preliminary-then-final decision framework used in federal agency proceedings where a staff decision becomes final upon the governing body's decision not to review it. The FINRA Regulation By-Laws provide for the call-for-review period, and FINRA Rule 9351 governs the Board's exercise of that authority.

The service obligations under FINRA Rule 9349(b) parallel those of FINRA Rule 9268(d) for Hearing Panel decisions: the NAC shall serve its written decision on the parties, provide a copy to each FINRA member with which a respondent is associated, and — following the August 2022 amendment — may serve by email with service deemed complete upon sending. The employer notification requirement carries the same purpose as at the first-level decision stage — enabling the employing firm to assess supervisory obligations under FINRA Rule 9285 and FINRA Rule 3110 following the NAC's determination.

The Email Service Amendment: August 2022

The most recent amendment to FINRA Rule 9349 — SR-FINRA-2022-009 effective August 22, 2022, announced in Regulatory Notice 22-16 — added the email service authority for NAC decisions. The NAC may serve its written decision by electronic mail, with service complete upon sending. This amendment aligned NAC decision service with the broader electronic service modernization that the same filing applied across the Code of Procedure. Prior to August 2022, FINRA Rule 9349 required service by traditional mail or other methods addressed in the FINRA Rule 9134 framework — email service of the NAC's final decision was not authorized. The permanent codification of email service for NAC decisions ensures that parties receive the most significant appellate document — the NAC's final determination — through the efficient and verifiable electronic service channel that the post-2022 Code framework establishes throughout.

Finality and the Connection to FINRA Rule 9370

The finality provision of FINRA Rule 9349 — the proposed written decision becoming the final disciplinary action of FINRA if not called for FINRA Board review — is the trigger for the respondent's right to seek SEC review under FINRA Rule 9370. Exchange Act Section 19(d)(2) provides that a person aggrieved by a final disciplinary action of a registered national securities association may apply to the SEC for review. The NAC's decision becoming final under FINRA Rule 9349 is the final disciplinary action that triggers this SEC review right. A respondent who wishes to appeal to the SEC must first have exhausted internal appellate remedies through the Rule 9300 Series — and the finality of the NAC's FINRA Rule 9349 decision is the point at which internal remedies are exhausted and external SEC review becomes available.

The connection to SEA Rule 19d-1(c)(1) — whose definition of final disciplinary action governs FINRA's reporting obligations to the SEC for all disciplinary outcomes — means that the NAC's final decision under FINRA Rule 9349 triggers FINRA's obligation to report the disciplinary action to the SEC as a final outcome. This reporting obligation runs in parallel with the public disclosure obligations that make the NAC decision available through BrokerCheck under FINRA Rule 8312 and the disciplinary actions database under FINRA Rule 8313.

The Remand Authority

FINRA Rule 9349(a)'s remand authority — the NAC or Review Subcommittee may remand the disciplinary proceeding with instructions — is exercised when the NAC identifies a problem at the first level that cannot be corrected through the NAC's own dispositional authority. Remands most commonly occur when the NAC finds that the OHO proceeding suffered a procedural defect that compromised the fairness of the first-level adjudication, that the Hearing Panel failed to address specific issues that must be resolved before the NAC can issue a final decision, or that the record requires supplementation through additional OHO proceedings before the NAC can properly assess the merits.

Remand instructions specify what OHO must do — conduct additional hearings, consider specific legal standards, address particular issues, or reconstitute the Panel — and typically establish a timeline for completing the remanded proceedings and returning the record to the NAC. The remand produces an OHO decision on the remanded issues that then returns to the NAC under the same Rule 9300 Series appellate framework, potentially including additional appeals, Subcommittee review, and NAC formal consideration.

Connection to FINRA Rules 9268, 9311, 9345, 9346, 9347, 9348, 9351, 9360, and 9370

FINRA Rule 9349 connects to FINRA Rule 9268 — whose Hearing Panel decision is the subject of the NAC's review and the decision the NAC affirms, modifies, reverses, or remands. It connects to FINRA Rule 9311 — whose appeal activates the NAC review that FINRA Rule 9349 governs. It connects to FINRA Rules 9345, 9346, and 9347 — whose recommended decision, evidence framework, and briefing provisions produce the analytical inputs that the NAC considers in its formal deliberations. It connects to FINRA Rule 9348 — whose powers on review are the specific authority the NAC exercises under FINRA Rule 9349(a). It connects to FINRA Rule 9351 — whose FINRA Board discretionary review authority is triggered by the NAC's proposed decision under FINRA Rule 9349(b). It connects to FINRA Rule 9360 — whose sanctions effectiveness provisions govern when the sanctions in a FINRA Rule 9349 decision take effect. And it connects to FINRA Rule 9370 — whose SEC review application right is triggered by the finality of the FINRA Rule 9349 decision.

Examination Relevance and Key Takeaways

FINRA Rule 9349 is tested on the Series 24 General Securities Principal examination as the NAC formal consideration and decision rule — the culminating rule of the internal appellate process that produces FINRA's final disciplinary action at the NAC level.

The key points to retain are these: FINRA Rule 9349(a) provides that in any appeal or review proceeding not withdrawn or dismissed before a merits decision the NAC considers all matters presented and the Subcommittee's recommended decision and exercises its FINRA Rule 9348 authority — affirming, dismissing, modifying, or reversing findings and affirming, modifying, reversing, increasing, or reducing sanctions with respect to each respondent who appealed, cross-appealed, or is subject to a call for review; the NAC or Review Subcommittee may alternatively remand with instructions; FINRA Rule 9349(b) requires the NAC to prepare a proposed written decision provided to the FINRA Board; the proposed decision becomes the final disciplinary action of FINRA for SEA Rule 19d-1(c)(1) purposes if the FINRA Board does not call it for review under FINRA Rule 9351; the NAC must serve the decision on all parties and provide copies to each FINRA member employing a respondent; the NAC may serve by email with service complete upon sending — added by SR-FINRA-2022-009 effective August 22, 2022 as announced in Regulatory Notice 22-16; finality of the FINRA Rule 9349 decision exhausts internal appellate remedies and triggers the respondent's right to seek SEC review under FINRA Rule 9370 and Exchange Act Section 19(d)(2); and the rule was last amended August 22, 2022 through SR-FINRA-2022-009.