SEC Seeks Peer Review of FINRA’s Proposed Outside Activities Rule

In March 2025, the Financial Industry Regulatory Authority (FINRA) published and requested comment on a proposed new “outside activities” Rule 3290 that would combine and replace Rules 3270 (outside business activities) and 3280 (private securities transactions) and focus only on “investment-related” outside activities of registered personnel. See “FINRA’s Symphonic Reimagining of Its OBA and PST Rules,” Expect Focus – Life, Annuity, and Retirement Solutions (August 2025). These proposals are part of FINRA’s ongoing “FINRA Forward” rule modernization initiative.

Commenters on FINRA’s 2025 outside activities proposal requested second opinions on certain proposed exclusions from the rule and reporting requirement differences between the proposed rule and Form U4.

After dissecting 216 comment letters, FINRA revised portions of the 2025 proposal and submitted it to the SEC. The SEC published proposed Rule 3290 as revised on January 29, 2026, and requested comment. In its revised proposal, FINRA:

• Eliminates the requirement for firms to engage in supervision and record-keeping of outside unaffiliated investment adviser activities. Like outside affiliated investment adviser activity, this activity would be considered outside activity under Rule 3290 (and not an outside securities transaction) that would continue to require prior written notice and assessment but would not require record-keeping or supervision.
• Adds supplementary material to clarify the application of Rule 3290 to unaffiliated investment adviser activity, as well as to banking and insurance networking activity.
• Does not reconcile Form U4 reporting of non-investment related activities with proposed Rule 3290 reporting of investment-related-only activities. To further address any differences, however, FINRA offers to work with the SEC and state securities regulators “to harmonize the requirements where appropriate.”

With few exceptions, commenters on FINRA’s revised outside activities proposal have not requested second or third opinions. Indeed, reaction has been positive except for those commenters who seek more regulation, such as Massachusetts chief securities regulator William Galvin, or firms and trade groups that seek resolution of the chronic pain caused by differing Rule 3290/Form U4 investment/non-investment-related reporting requirements. The comment period on proposed Rule 3290 has been extended to May 4, 2026.