Dual registrant regulatory roundup - June 2026

SEC institutes proceedings on FINRA proposed rule changes for outside activities and communications with the public

• On May 1, the SEC issued an order instituting proceedings to determine whether to approve or disapprove FINRA's proposed Rule 3290 (Outside Activities Requirements), which would replace existing FINRA Rules 3270 (Outside Business Activities of Registered Persons) and 3280 (Private Securities Transactions of an Associated Person) with a unified rule governing outside activities and outside securities transactions. The proposed rule change was originally filed on January 22, 2026, and published for comment in the Federal Register on February 3, 2026. In connection with the order, FINRA filed Amendment No. 1 to modify the proposed rule change and responded to comment letters received during the public comment period.
• On May 20, the SEC issued a separate order instituting proceedings to determine whether to approve or disapprove FINRA's proposed amendments to Rule 2210 (Communications with the Public), which would permit broker-dealers to project performance or provide a targeted return with respect to a security, a securities portfolio, or an asset allocation or other investment strategy, subject to certain conditions. The proposed rule change was originally filed on February 10, 2026, and published for comment in the Federal Register on February 25, 2026.
• In both orders, the SEC stated that institution of proceedings does not indicate that the Commission has reached any conclusions with respect to either proposed rule change. The SEC invited interested persons to submit additional written data, views, and arguments within 21 days of publication of each order in the Federal Register. Both proposals were covered in prior editions of this Roundup.

FINRA launches targeted sweep of worst-of structured notes

• In May, FINRA initiated a targeted examination sweep focused on member firms' supervision of concentrations in non-principal protected "worst-of" structured notes. "Worst-of" structured notes are principal-at-risk notes that may result in a reduction or cessation in interest payments, and/or a reduced return of principal at maturity, based on the worst-performing asset in a group of two or more reference assets.
• FINRA's sweep letter requests information on firms' supervisory systems, procedures, and controls related to these products, including: written supervisory procedures for structured notes and complex products; how the firm categorizes structured notes by risk feature; any restrictions or concentration limitations on recommendations; supervisory alerts and exception criteria; structured product training requirements; registered representative compensation arrangements; identification and mitigation of product-related conflicts of interest; and information provided to customers concerning the products and related compensation. The sweep covers the period from January 1, 2022 through December 31, 2025.
• More information on the targeted sweep can be found in our firm’s recent legal alert.

FINRA publishes 2026 industry snapshot

• On June 1, FINRA published its 2026 Industry Snapshot, an annual report providing aggregate data about member firms, registered representatives and market activity based on data FINRA collects and maintains through its regulatory oversight.
• Among the report's findings, the number of registered representatives climbed for the fourth consecutive year to 639,723 in 2025, a 5% increase since 2021, with 40,000 to 45,000 people entering the industry annually. The number of FINRA member firms fell roughly 6% to 3,184 in 2025, with small firms accounting for most of the decline. Total industry revenue reached $776.8 billion in 2025, nearly doubling from $398.5 billion in 2021.
• The report also found that more than half of FINRA-registered representatives—331,802 individuals—maintained dual registration as both registered representatives and investment adviser representatives as of year-end 2025. In 2025, 11,294 broker-dealer-only representatives added investment adviser registration, compared to only 1,800 dual-registered representatives who dropped to broker-dealer-only status.

SEC publishes draft strategic plan

• On June 2, the SEC published a Draft Strategic Plan organized around three goals: (1) protecting investors; (2) maintaining fair, orderly and efficient markets; and (3) facilitating capital formation.
• The first goal focuses on modernizing and simplifying disclosure practices, expanding access to private markets, and providing a regulatory foundation for digital assets. The second goal addresses increasing stakeholder engagement, facilitating compliance efforts of market participants and restoring an enforcement approach focused on policing violations of established law, such as fraud and manipulation. The second goal also contemplates periodic retrospective reviews of existing rules. The third goal focuses on optimizing the SEC's operational efficiency by modernizing technology—including a review of legacy systems such as EDGAR—and the responsible use of artificial intelligence and blockchain technologies.
• Comments on the Draft Strategic Plan are due by July 2, 2026.

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