FINRA trims pre-review of negative-consent bulk transfer letters

FINRA said in Regulatory Notice 26-03, published Feb. 6, 2026, that it will discontinue its current practice of reviewing firms’ draft customer letters that use negative consent to effect bulk transfers or assignments of customer accounts and issuing a staff “no objection” before the letters are sent; FINRA stated this change will become effective April 1, 2026.

FINRA also consolidated prior FINRA guidance on when negative consent may be appropriate in limited circumstances for bulk transfers or assignments, while reiterating that, in general, member firms must obtain a customer’s affirmative consent or instruction and that transfers without consent could conflict with FINRA Rule 2010. FINRA said the Notice does not create new legal or regulatory requirements or new interpretations, and does not relieve firms of existing obligations, and it stated that FINRA staff will continue to provide interpretive guidance on request for new or novel situations and will continue to review firms’ use of negative consent in examinations.

FINRA’s stated effective practices for members using negative consent include emphasising prior written customer authorisation (which FINRA said firms may consider obtaining during onboarding), compliance with applicable requirements including, as relevant, FINRA Rule 1017 (Continuing Membership Application), FINRA Rule 2210 (retail communications content standards), Regulation S-P (customer privacy) and Exchange Act Rule 15c3-3(j) (including issues involving free credit balances and sweep programs).

FINRA also reiterated timing and disclosure considerations drawn from earlier guidance, including that absent exigent circumstances members should provide customers at least 30 days’ notice, that letters should clearly describe the circumstances necessitating the change and any immediate impacts such as trading restrictions, and that opt-out provisions should specify deadlines, methods to object, and alternatives and consequences if the customer opts out without transferring elsewhere. FINRA further stated that customers who do not opt out should not be charged for transfers or assignments based on negative consent, and that delivering firms should waive ACATS fees for customers who opt out and transfer to another firm, with FINRA noting that fees for involuntary ACATS transfers may be inappropriate under prior guidance.