Whenever a firm goes out of business, divests a business line, changes clearing firms, or gets acquired, the same operational problem shows up: thousands of customer accounts need to move to a new firm, and getting affirmative consent from every single customer is often not realistic on the timeline the situation demands. FINRA has long permitted firms to use "negative consent" in these bulk-transfer scenarios — sending a letter that says the account will transfer unless the customer objects — but for over twenty years, firms also had to submit draft negative-consent letters to FINRA staff for review and wait for a "no objection" before sending them. As of April 1, 2026, that review step is gone.
Regulatory Notice 26-03 doesn't create new rules. It consolidates two decades of guidance issued since Notice to Members 02-57, eliminates the pre-clearance requirement, and sets out the effective practices FINRA expects firms to follow on their own. For firms with an M&A, succession, or business-line transition on the horizon, this is a meaningful operational change — the same letter that used to require a staff review cycle before it could go out the door can now be sent as soon as it's ready.
When negative consent is appropriate
FINRA's list of illustrative (not exhaustive) scenarios includes an introducing firm moving to a new clearing firm, a firm going out of business and transferring all its accounts, a firm divesting a specific business line, a clearing firm assigning "orphan" accounts after an introducing firm shuts down, a firm being acquired or merged, and the conclusion of a networking or retirement-plan arrangement. The common denominator: affirmative consent is impractical given the scale or the circumstances, not simply inconvenient.
What still has to be in the letter
- Prior written authorization. Firms should obtain customers' authorization to use negative consent up front — commonly during onboarding, in the account opening agreement — rather than assuming it after the fact.
- At least 30 days' notice, absent exigent circumstances such as a firm closing on short notice for unforeseen reasons.
- A clear, concise description of why the transfer is happening and what changes for the customer, including anything about the receiving firm's services or any trading restrictions during the transition.
- Explicit opt-out mechanics — the deadline to object, how to object, and what happens if the customer opts out without transferring to a different firm on their own.
- No fees for customers who opt out, and firms should consider waiving ACATS fees for a window after the transfer (30–60 days is the practice FINRA references) for customers who change their minds shortly after.
- A Regulation S-P compliance statement, confirming the transfer complies with the SEC's privacy and safeguarding rules for customer financial information.
How Compliers Can Help
We help firms manage the compliance side of account transfers, business-line transitions, and M&A integrations — including negative consent letters that meet FINRA's effective practices without the delay of a pre-clearance step that no longer applies. See our Consulting & Staffing page.
Removing the checkpoint raises the stakes on getting it right the first time
FINRA staff will still provide interpretive guidance on request for novel situations, and the examination process will continue to review how firms actually use negative consent. What's changed is that there's no longer a built-in second set of eyes before the letter goes out. For firms without in-house counsel who's handled a bulk transfer before, that makes getting the letter right on the first attempt — rather than relying on FINRA's review to catch a gap — more important than it used to be.