National Adjudicatory Council

Rule 9120 contains the definitions used in these paragraphs. In the Rule 9300 Series, a Party is the Department of Enforcement or a Respondent. In an appeal or review governed by the Rule 9300 Series, a Respondent is a FINRA member or associated person against whom a complaint is issued. In a disciplinary proceeding governed by the Rule 9200 Series, the Hearing Panel is the adjudicator constituted under Rule 9231 to conduct the proceeding. 

An adjudicator includes a body, board, committee, group, or natural person that presides over a proceeding and renders a decision, and the term includes a Review Subcommittee, a Subcommittee, an Extended Proceeding Committee, and a Statutory Disqualification Committee. A Hearing Officer is an employee of FINRA, or former employee of FINRA who previously acted as a Hearing Officer, who is an attorney and who is appointed by the Chief Hearing Officer to act in an adjudicative role and fulfill various adjudicative responsibilities and duties described in the Rule 9200 Series regarding disciplinary proceedings, the Rule 9550 Series regarding expedited proceedings, the Rule 9700 Series relating to grievances concerning FINRA automated systems, and the Rule 9800 Series regarding temporary cease and desist proceedings brought against members and associated persons. The Chief Hearing Officer is the Hearing Officer designated by the Chief Executive Officer of FINRA to manage the Office of Hearing Officers, or his or her delegatee.

What the NAC Does

Provisions on the NAC appear in Article V of the By-Laws of FINRA Regulation, Inc. The NAC may be authorized to act for the FINRA Board, in a manner consistent with the By-Laws, FINRA’s rules and the Delegation Plan, with respect to an appeal or review of a disciplinary proceeding, a statutory disqualification proceeding, or a membership proceeding; a review of an offer of settlement, a letter of acceptance, waiver, and consent, and a minor rule violation plan letter; the exercise of exemptive authority; and such other proceedings or actions as FINRA’s rules authorize.

The NAC also must consider and make recommendations to the FINRA Board on policy and rule changes relating to the business and sales practices of FINRA members and associated persons and enforcement policies, including policies with respect to fines and other sanctions. The FINRA Board may delegate to the NAC other powers and duties that the FINRA Board deems appropriate, in a manner not inconsistent with the Delegation Plan.

Who Serves on the NAC

As of October 2026, the NAC consists of fifteen members. The number of Non-Industry Members, including at least three Public Members, must exceed the number of Industry Members. The Industry Members include two Small Firm NAC Members, one Mid-Size Firm NAC Member, two Large Firm NAC Members, and two at-large Industry Members, and the at-large Industry Members are appointed to the NAC without being designated as Small, Mid-Size, or Large Firm NAC Members.

The FINRA Board appoints the NAC and all its members. The at-large Industry and Non-Industry Members are appointed by the FINRA Board from candidates recommended by the Nominating Committee. The Small Firm, Mid-Size Firm and Large Firm NAC Members also are appointed by the FINRA Board from candidates recommended by the Nominating Committee, but in the event of a contested election, those members are elected by the membership by a plurality of the votes of the members entitled to vote for that category in accordance with the provisions of the By-Laws and thereafter appointed by the FINRA Board. If the FINRA Board rejects the nominee of the Nominating Committee, the Nominating Committee repeats the nomination procedures. The FINRA Board may not reject Small Firm, Mid-Size Firm and Large Firm NAC Members elected in accordance with the provisions of Article VI.

The Secretary of the Corporation, meaning the Financial Industry Regulatory Authority, Inc., collects from each nominee for the office of NAC member the information reasonably necessary to determine the nominee’s classification as an Industry, Small Firm, Mid-Size Firm, Large Firm, Non-Industry, or Public Member. After appointment, each member updates that information at least annually and upon request of the Secretary, and informs the Secretary immediately of any change in classification.

The incumbent NAC elects a Chair and a Vice Chair from among the members serving during the following term. The Chair and Vice Chair have such powers and duties as the NAC determines from time to time. The FINRA Board, by resolution adopted by a majority of the Governors then in office, may remove the Chair or Vice Chair from that position at any time for refusal, failure, neglect, or inability to discharge his or her duties.

After a transitional period beginning in January 2017 and ending in December 2019, during which members could be appointed to terms of office necessary to achieve the four-class structure, each NAC member holds office for a term of four years or until a successor is duly appointed and qualified, except in the event of earlier termination from office by reason of death, resignation, removal, disqualification, or other reason. The NAC is divided into four classes, as equal in number as practicable, with terms of office that commence and expire on a staggered, annual basis. No member may serve consecutive terms, except that if a member is appointed to fill a term of less than one year, that member may serve a single four year term following the expiration of the member’s initial term.

The Review Subcommittee, Subcommittees and Counsel

The NAC appoints a Review Subcommittee to determine whether disciplinary and membership proceedings decisions should be called for review by the NAC under FINRA’s rules and to perform any other function authorized by FINRA’s rules. The Review Subcommittee is composed of no fewer than two and no more than four members of the NAC. The number of Non-Industry Members on the Review Subcommittee equals or exceeds the number of Industry Members. At all meetings of the Review Subcommittee, a quorum for the transaction of business consists of not less than 50 percent of the members of the Review Subcommittee, including not less than 50 percent of the Non-Industry Members.

Following the filing of a notice of appeal under Rule 9311 or a notice of review under Rule 9312, the NAC or the Review Subcommittee appoints a Subcommittee or an Extended Proceeding Committee to participate, subject to Rule 9345, in the disciplinary proceeding appealed or called for review. For each disciplinary proceeding appealed or called for review, the NAC or the Review Subcommittee appoints a Subcommittee, unless the proceeding is designated an Extended Proceeding. A Subcommittee is composed of two or more persons who are current or former members of the NAC or former Directors or Governors.

Upon consideration of the volume and complexity of the certified record, or other factors the NAC or the Review Subcommittee deems material, the NAC or the Review Subcommittee may determine that a disciplinary proceeding appealed or called for review is designated an Extended Proceeding and appoint an Extended Proceeding Committee. The Extended Proceeding Committee is composed of two or more persons who are current or former members of the NAC or former Directors or former Governors.

If a hearing is held, the Subcommittee or, if applicable, the Extended Proceeding Committee hears oral arguments and considers, if allowed under Rule 9346(b), any new evidence. Based on the hearing and the record on appeal or review, the Subcommittee or Extended Proceeding Committee makes a recommendation to the NAC regarding the disposition of all items on appeal, cross-appeal, or review. The recommendation is in the form of a written recommended decision, and the Subcommittee or Extended Proceeding Committee presents the recommended decision in writing to the NAC before the meeting of the NAC at which the disciplinary proceeding is considered.

A Counsel to the NAC has authority to take ministerial and administrative actions to further the efficient administration of a proceeding. That authority includes directing the Office of Hearing Officers to complete and transmit a record of a disciplinary proceeding to the NAC in accordance with Rule 9267; establishing or amending a briefing schedule under Rule 9347(b), but not shortening a briefing schedule except with the consent of the Parties; establishing the date, time, and location of an oral argument and providing for notice of the hearing under Rule 9341; and creating and maintaining the official record of the disciplinary proceeding on appeal or review. A Party seeking the review of a decision of a Counsel to the NAC may make a motion to the NAC, the Review Subcommittee, a Subcommittee or, if applicable, an Extended Proceeding Committee.

Recusal and Disqualification

Rule 9332, Disqualification and Recusal, covers recusal and disqualification of members of the NAC and the Review Subcommittee, Panelists and Counsel to the NAC.

If a member of the NAC, including a member of the Review Subcommittee, a Panelist of a Subcommittee or an Extended Proceeding Committee, or a Counsel to the NAC determines that the member, the Panelist, or the Counsel has a conflict of interest or bias, or that circumstances otherwise exist where the fairness of the member, the Panelist, or the Counsel might reasonably be questioned, that person notifies the Chair or the Vice Chair of the NAC. 

The Chair or the Vice Chair then issues and serves on the Parties a notice stating that the member, the Panelist, or the Counsel has withdrawn from the matter. If a Panelist withdraws, is incapacitated, or is otherwise unable to continue service after a hearing has been convened, the Chair or Vice Chair of the NAC appoints a replacement Panelist. If a member of the Review Subcommittee withdraws, is incapacitated, or is otherwise unable to continue service after assignment, the Chair or Vice Chair of the NAC appoints another member of the NAC to serve on the Review Subcommittee for the limited purpose of considering the issues raised in the disciplinary proceeding in which the withdrawal action was taken. The replacement member of the Review Subcommittee must have the same classification, Industry or Non-Industry, as the member who withdrew.

A Party may move for the disqualification of a member of the NAC, the Review Subcommittee, a Panelist of a Subcommittee or an Extended Proceeding Committee, or a Counsel to the NAC. Every such motion is based upon a reasonable, good faith belief that a conflict of interest or bias exists, or that circumstances otherwise exist where the fairness of the member, the Panelist, or the Counsel might reasonably be questioned, and is accompanied by an affidavit setting forth in detail the facts claimed to constitute grounds for disqualification and the dates on which the Party learned of those facts.

How a Disciplinary Case Reaches the NAC

Within sixty days after the final date allowed for filing proposed findings of fact, conclusions of law, and post-hearing briefs, or by a date established at the discretion of the Chief Hearing Officer, the Hearing Officer prepares a written decision that reflects the views of the Hearing Panel or, if applicable, the Extended Hearing Panel, as determined by majority vote. That decision is issued under Rule 9268. The Hearing Officer may also issue a default decision under Rule 9269 against a Respondent that fails to answer the complaint within the time afforded under Rule 9215, or a Party that fails to appear at a pre-hearing conference held under Rule 9241 of which the Party has due notice, or a Party that fails to appear at any hearing that the Party is required to attend under the Rule 9200 Series of which the Party has due notice.

The decision of the Hearing Panel becomes final if a party does not timely appeal the decision and the NAC does not timely call the decision for review. A decision reaches the NAC in one of two ways, by an appeal under Rule 9311 or by a call for review under Rule 9312.

Appeal by a Party

As of October 2026, a Respondent or the Department of Enforcement may file a written notice of appeal within twenty-five days after service of a decision issued under Rule 9268 or Rule 9269. A Party appealing files the written notice of appeal with the Office of Hearing Officers and serves the notice on the Parties. The notice is signed by the appealing Party, or his or her counsel or representative, and contains the name of the disciplinary proceeding; the disciplinary proceeding docket number; the name of the Party on whose behalf the appeal is made; a statement on whether oral argument before the NAC is requested; and a brief statement of the findings, conclusions, or sanctions as to which exceptions are taken.

A Party who is served with a notice of appeal may file a written notice of cross-appeal and serve it on the Parties. The notice of cross-appeal is filed within five days after service of the notice of appeal. It is signed by the Party cross-appealing, or his or her counsel, and contains the name of the disciplinary proceeding; the disciplinary proceeding docket number; a statement on whether oral argument before the NAC is requested; a brief statement of the findings, conclusions, or sanctions as to which exceptions are taken; and the name of the Party on whose behalf the cross-appeal is made.

The NAC may, in its discretion, deem waived any issue not raised in the notice of appeal or cross-appeal. The NAC, the Review Subcommittee, a Subcommittee, the General Counsel or, if applicable, an Extended Proceeding Committee provides the Parties with notice of, and an opportunity to submit briefs on, any issue that will be considered by the NAC if the issue was not previously set forth in the notice of appeal.

A Party may withdraw a notice of appeal or a notice of cross-appeal filed by him or her at any time by filing a written notice of withdrawal of appeal or cross-appeal with the Office of Hearing Officers and serving notice of the withdrawal on the Parties. Upon the withdrawal of a notice of appeal, any outstanding cross-appeal is treated as an appeal unless it is withdrawn.

When an appeal is filed from a decision finding that a Respondent violated a statute or rule provision, the Office of Hearing Officers promptly notifies each FINRA member with which the Respondent is associated that an appeal has been filed.

Call for Review by the NAC

A decision issued under Rule 9268 may be subject to a call for review by any member of the NAC or, under authority delegated from the NAC, by any member of the Review Subcommittee. A decision issued under Rule 9268 is subject to a call for review within forty-five days after the date of service of the decision. If the decision is called for review, the NAC reviews it.

A default decision issued under Rule 9269 is subject to a call for review by the General Counsel, on his or her own motion, within twenty-five days after the date of service of the decision. If the decision is called for review, the Review Subcommittee or the NAC reviews it.

When a member of the NAC, a member of the Review Subcommittee, or, for a disciplinary proceeding decided under Rule 9269, the General Counsel determines to call a case for review, a written notice of review is served promptly on each Party to the proceeding and filed with the Office of Hearing Officers. The notice of review contains the name of the disciplinary proceeding; the disciplinary proceeding docket number; and a brief statement of the findings, conclusions, or sanctions with respect to which the NAC, the Review Subcommittee, or the General Counsel determined that a call for review was necessary. The statement in the notice of review does not limit the scope of the NAC’s authority under Rule 9346 to review any issues raised in the record.

When a decision finding that a Respondent violated a statute or rule provision is called for review, the Office of General Counsel promptly notifies each FINRA member with which the Respondent is associated of the call for review.

If the review of a disciplinary proceeding by the NAC is terminated before the NAC issues a decision on the merits, either through the filing by all appealing Parties of a notice of withdrawal of appeal when no Party previously filed a notice of cross-appeal, or through the filing by all Parties who previously filed a notice of cross-appeal of a notice of withdrawal of cross-appeal, a member of the NAC or the Review Subcommittee has the right to call for review a decision issued under Rule 9268, except that the forty-five day period begins on the day FINRA receives the last filed notice of withdrawal of appeal or, if applicable, the last filed notice of withdrawal of cross-appeal. The General Counsel has the corresponding right for a decision issued under Rule 9269, with a twenty-five day period that begins on the same day.

What Happens to a Sanction During an Appeal

An appeal to the NAC from a decision issued under Rule 9268 or Rule 9269 operates as a stay of that decision until the NAC issues a decision under Rule 9349 or, in cases called for discretionary review by the FINRA Board, until a decision is issued under Rule 9351. Any such appeal does not stay a decision, or that part of a decision, that imposes a permanent cease and desist order. Institution of a review by a member of the NAC on his or her own motion, a member of the Review Subcommittee on his or her own motion, or the General Counsel on his or her own motion operates as a stay of a final decision issued under Rule 9268 or Rule 9269 as to all Parties subject to the notice of review, on the same terms and with the same exception.

Notwithstanding the stay of sanctions, the Hearing Officer may impose such conditions and restrictions on the activities of a Respondent as the Hearing Officer considers reasonably necessary for the purpose of preventing customer harm in accordance with Rule 9285(a), and the Review Subcommittee considers any motion filed under Rule 9285(b) to modify or remove any or all of the conditions or restrictions.

The Record and Oral Argument

As of October 2026, under Rule 9321, within twenty-one days after the filing of a notice of appeal under Rule 9311 or a notice of call for review under Rule 9312, or at such later time as the NAC may designate, the Office of Hearing Officers assembles and prepares an index to the record, transmits the record and the index to the NAC, and serves copies of the index upon all Parties.

Under Rule 9346(a), except as otherwise set forth in that paragraph, the NAC’s review is limited to consideration of the record, as defined in Rule 9267, supplemented by briefs and other papers submitted to the Subcommittee or, if applicable, the Extended Proceeding Committee, and the NAC, and any oral argument permitted under the Code of Procedure. A Party may introduce additional evidence only with prior approval of the Subcommittee or, if applicable, the Extended Proceeding Committee, or the NAC, upon a showing that extraordinary circumstances exist under Rule 9346(b). A Party may apply for leave to introduce additional evidence by motion filed not later than thirty days after the Office of Hearing Officers transmits to the NAC and serves upon all Parties the index to the record. The motion sets out each item of proposed new evidence, demonstrates that there was good cause for failing to introduce it below, and demonstrates why the evidence is material to the proceeding. The formal rules of evidence do not apply.

A Party may request oral argument before the Subcommittee or, if applicable, the Extended Proceeding Committee. Oral argument is requested in writing either in the Party’s notice of appeal or cross-appeal or within fifteen days after service of the NAC’s notice of review. Subject to the limitations of Rule 9342 and Rule 9344, oral argument must be granted if timely requested. In the absence of a request for oral argument, the Subcommittee or Extended Proceeding Committee, in its discretion, may order that a matter be set down for oral argument or may consider the matter on the basis of the record.

If oral argument is held, a notice stating the date, time, and location of the oral argument is served on the Parties at least twenty-one days before the hearing and may be served by electronic mail. Unless the Subcommittee or Extended Proceeding Committee orders otherwise for good cause shown, each Party’s oral argument is limited to a total of thirty minutes. Oral arguments are recorded by a court reporter and a transcript is prepared.

A Party who requests oral argument but fails to appear after being duly notified is deemed to have waived any opportunity for oral argument provided under the Rule 9300 Series. The Subcommittee or Extended Proceeding Committee permits argument to go forward as to those Parties who appear, and in the exercise of its discretion may consider the matter on the basis of the record without oral argument as to those Parties who failed to appear. Under Rule 9343, if an oral argument is not held, the matter is considered by a Subcommittee or, if applicable, an Extended Proceeding Committee on the basis of the record, as defined in Rule 9267, supplemented by any written materials submitted to or issued by the Subcommittee or Extended Proceeding Committee, or the NAC, in connection with the appeal, cross-appeal, or call for review.

Failure to Participate Below and Abandonment of an Appeal

If an appealing Party did not participate in the disciplinary proceeding before a Hearing Officer, a Hearing Panel or, if applicable, an Extended Hearing Panel, and fails to show good cause for the failure to participate, the matter is considered by the Subcommittee or Extended Proceeding Committee and the NAC on the basis of the record and other documents, as provided in Rule 9346 and Rule 9347. When good cause is shown, the NAC or the Review Subcommittee remands the disciplinary proceeding with instructions. Failure to participate includes failure to file an answer or otherwise respond to a complaint, or failure to appear at a scheduled hearing, but does not include failure to request a hearing under Rule 9221.

If an appealing Party fails to advise the NAC or the Review Subcommittee of the basis for seeking review, or otherwise fails to provide information or submit a written brief in response to a request under Rule 9346 and Rule 9347, the NAC or the Review Subcommittee may dismiss the appeal as abandoned, and the decision of the Hearing Officer, the Hearing Panel or, if applicable, the Extended Hearing Panel becomes the final disciplinary action of FINRA. If a cross-appealing Party fails to advise the NAC or the Review Subcommittee of the basis for seeking review, or otherwise fails to provide information or submit a written brief in response to a request under Rule 9346 and Rule 9347, the NAC or the Review Subcommittee may dismiss the cross-appeal as abandoned. Upon a showing of good cause, the NAC may withdraw any dismissal entered under Rule 9344.

How the NAC Decides

Rule 9348, Powers of the National Adjudicatory Council on Review, and Rule 9349, National Adjudicatory Council Formal Consideration; Decision, govern what the NAC may do and how it decides.

In an appeal or review of a disciplinary proceeding governed by the Rule 9300 Series that is not withdrawn or dismissed before a decision on the merits, the NAC, after considering everything presented in the appeal or review and the written recommended decision of the Subcommittee or, if applicable, the Extended Proceeding Committee, may affirm, dismiss, modify or reverse the decision of the Hearing Panel or, if applicable, the Extended Hearing Panel, with respect to each Respondent who has appealed or 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 the Review Subcommittee may remand the disciplinary proceeding with instructions.

The NAC’s decision includes a statement describing the investigative or other origin of the disciplinary proceeding, if not otherwise contained in the record; the specific statutory or rule provisions that were alleged to have been violated; a statement setting forth the findings of fact with respect to any act or practice the Respondent was alleged to have committed or omitted; the conclusions as to whether the Respondent violated any provision alleged in the complaint; a statement in support of the disposition of the principal issues raised in the proceeding; and a statement describing any sanction imposed, the reasons for it, and, under Rule 9360, the date upon which the sanction becomes effective.

The NAC provides its proposed written decision to the FINRA Board. The FINRA Board may call the disciplinary proceeding for review under Rule 9351. If the FINRA Board does not call the disciplinary proceeding for review, the proposed written decision of the NAC becomes final, and the NAC serves its written decision on the Parties and provides a copy to each member of FINRA with which a Respondent is associated. The NAC may serve its written decision by electronic mail, and service by electronic mail is deemed complete upon sending the decision. The decision constitutes the final disciplinary action of FINRA, unless the NAC remands the proceeding.

Review by the FINRA Board

A Governor may call a disciplinary proceeding for review by the FINRA Board if the call for review is made within the prescribed period. A Governor makes the call for review not later than the next meeting of the FINRA Board that is at least fifteen days after the date on which the FINRA Board receives the proposed written decision of the NAC. By a unanimous vote of the FINRA Board, the FINRA Board may shorten that period to less than fifteen days. By an affirmative vote of the majority of the FINRA Board then in office, the FINRA Board may, during the fifteen day period, vote to extend the period to more than fifteen days.

If a Governor calls a disciplinary proceeding for review within the period, the FINRA Board reviews the disciplinary proceeding not later than the next meeting of the FINRA Board. The FINRA Board may order the Parties, excluding any Respondent who did not appeal or cross-appeal, or as to whom the issues appealed or called for review do not apply, to file briefs in connection with the review proceedings.

After review, the FINRA Board may affirm, modify, or reverse the proposed written decision of the NAC. The FINRA Board may affirm, modify, reverse, increase, or reduce any sanction, including the terms of any permanent cease and desist order, or impose any other fitting sanction. Alternatively, the FINRA Board may remand the disciplinary proceeding with instructions. The FINRA Board prepares a written decision that includes all of the elements described in Rule 9349(b)(1) through (6), issues and serves the decision on the Parties, and provides a copy to each member of FINRA with which a Respondent is associated. The decision constitutes the final disciplinary action of FINRA, unless the FINRA Board remands the proceeding.

Sanctions and When They Take Effect

Rule 8310 lists the sanctions that FINRA, after compliance with the Rule 9000 Series, may impose on a member or person associated with a member for each violation of the federal securities laws, rules or regulations under them, the rules of the Municipal Securities Rulemaking Board, or FINRA rules, and for any neglect or refusal to comply with an order, direction, or decision issued under the FINRA rules. The listed sanctions are censure; a fine; suspension of the membership of a member or of the registration of a person associated with a member for a definite period or a period contingent on the performance of a particular act; expulsion of a member, cancellation of the membership of a member, or revocation or cancellation of the registration of a person associated with a member; suspension or bar of a member or person associated with a member from association with all members; a temporary or permanent cease and desist order against a member or a person associated with a member; and any other fitting sanction.

Unless otherwise provided in the decision issued under Rule 9349 or Rule 9351, a sanction other than a bar, an expulsion, or a permanent cease and desist order, specified in a decision constituting final disciplinary action of FINRA for purposes of Securities Exchange Act Rule 19d-1(c)(1), becomes effective on a date to be determined by FINRA staff. A bar or a permanent cease and desist order becomes effective upon service of the decision constituting final disciplinary action of FINRA, unless otherwise specified in it. An expulsion does not become effective until the time for filing an application for review with the SEC has expired and no such application is filed or, if such an application is timely filed, until the SEC completes its review under Section 19 of the Securities Exchange Act of 1934. FINRA serves the decision on a Respondent by courier, facsimile or other means reasonably likely to obtain prompt service when the sanction is a bar, an expulsion, or a permanent cease and desist order.

Review by the SEC and the Federal Courts

Rule 9370 is titled Application to SEC for Review. As of October 2026, the right to have any action under the Rule 9200 Series or the Rule 9300 Series reviewed by the SEC is governed by Section 19 of the Securities Exchange Act of 1934. The filing with the SEC of an application for review stays the effectiveness of any sanction, other than a bar, or an expulsion under Rule 9268 or Rule 9269, imposed in a decision constituting final disciplinary action of FINRA for purposes of Securities Exchange Act Rule 19d-1(c)(1). FINRA promptly notifies any FINRA member with which a Respondent is associated if the Respondent files an application for review to the SEC.

An applicant must file an application for review with the SEC within thirty days after the notice of the determination is filed with the SEC and received by the aggrieved person applying for review. The SEC will not extend this thirty-day period, absent a showing of extraordinary circumstances.

A person aggrieved by a final order of the SEC entered under the Securities Exchange Act of 1934 may obtain review of the order in the United States Court of Appeals for the circuit in which the person resides or has a principal place of business, or for the District of Columbia Circuit, by filing in that court, within sixty days after the entry of the order, a written petition requesting that the order be modified or set aside in whole or in part. On the filing of the petition, the court has jurisdiction, which becomes exclusive on the filing of the record, to affirm or modify and enforce or to set aside the order in whole or in part.

Membership Proceedings

The NAC also reviews decisions in membership proceedings. In Rule 1011, an Applicant is 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, and the Department is the Department of Member Regulation of FINRA. Within twenty-five days after service of a decision under Rule 1014 or Rule 1017, an Applicant may file a written request for review with the NAC. A request for review must set forth with specificity why the Applicant believes that the Department’s decision is inconsistent with the membership standards set forth in Rule 1014, or otherwise should be set aside, and must state whether a hearing is requested. Within ten days after the filing of a request for review, the Department transmits to the NAC copies of all documents that were considered in connection with the Department’s decision and an index to the documents, and serves on the Applicant a copy of those documents, other than those originally submitted by the Applicant, and a copy of the index.

The Appeal Path in Order

A Hearing Panel decision is appealed by a Respondent or the Department of Enforcement to the NAC, or is called for review by the NAC. The FINRA Board may call the NAC’s proposed written decision for review. FINRA’s final disciplinary action may then be the subject of an application for review by the SEC. A person aggrieved by a final order of the SEC may seek review in a United States Court of Appeals.

Exam Relevance

The Securities Industry Essentials examination content outline does not name the National Adjudicatory Council. The Rules listed for Section 4, Overview of the Regulatory Framework, include FINRA By-Laws Article XII, Disciplinary Proceedings.

Topic 3.3.2, Insider Trading, under 3.3, Prohibited Activities, in Section 3, Understanding Trading, Customer Accounts and Prohibited Activities, lists definition of insider trading; definition of material nonpublic information; identifying involved parties; and penalties, with fines, expulsion, and incarceration named in parentheses. Candidates should check the current outline before the examination.

Common Misunderstandings

The NAC conducts the first hearing in a disciplinary case. In a disciplinary proceeding governed by the Rule 9200 Series, the Hearing Panel conducts the proceeding, and the NAC reviews initial decisions rendered in disciplinary and membership proceedings.

A disciplined firm or individual appeals straight to the SEC. A Respondent or the Department of Enforcement may appeal a Hearing Panel decision to the NAC, and a firm or individual can appeal FINRA’s decision to the SEC.

The NAC’s decision is always the last step inside FINRA. Unless FINRA’s Board of Governors decides to review the NAC’s appellate decision, the NAC’s decision represents FINRA’s final action, and a Governor may call a disciplinary proceeding for review by the FINRA Board.

An appeal to the NAC can only lower a sanction. The NAC may affirm, modify, reverse, increase, or reduce any sanction, or impose any other fitting sanction.

Every sanction is paused when an appeal is filed. An appeal to the NAC does not stay a decision, or that part of a decision, that imposes a permanent cease and desist order.

Filing an application for review with the SEC stays every sanction. The filing with the SEC of an application for review stays the effectiveness of any sanction other than a bar, or an expulsion under Rule 9268 or Rule 9269.

The NAC is made up of industry members only. The number of Non-Industry Members, including at least three Public Members, must exceed the number of Industry Members.

The NAC hears only disciplinary cases. The NAC may be authorized to act with respect to an appeal or review of a disciplinary proceeding, a statutory disqualification proceeding, or a membership proceeding, and the NAC also reviews decisions in membership proceedings under Rule 1015.

Key Points to Retain

The National Adjudicatory Council reviews initial decisions rendered in FINRA disciplinary and membership proceedings.

A Respondent or the Department of Enforcement may appeal a Hearing Panel decision to the NAC, and the NAC may call a Hearing Panel decision for review on its own motion.

As of October 2026, a notice of appeal is due within twenty-five days after service of the decision, a cross-appeal within five days after service of the notice of appeal, and a call for review of a Rule 9268 decision within forty-five days.

The NAC may affirm, dismiss, modify, or reverse any finding, remand for further proceedings, and affirm, modify, reverse, increase, or reduce any sanction.

An appeal to the NAC stays the decision, except for a permanent cease and desist order.

The NAC’s proposed written decision goes to the FINRA Board, and the NAC’s decision represents FINRA’s final action unless the FINRA Board decides to review it.

A firm or individual can appeal FINRA’s final action to the SEC, and a person aggrieved by a final SEC order may seek review in a United States Court of Appeals.

The NAC consists of fifteen members, with more Non-Industry Members than Industry Members, and members serve staggered four-year terms.

The Securities Industry Essentials examination content outline does not name the National Adjudicatory Council, and Section 4 lists FINRA By-Laws Article XII, Disciplinary Proceedings, among its Rules.