FINRA rule change eases Rule 4515.01 review of adviser bulk orders

The news: FINRA Regulatory Notice 26-17, published Oct. 9, announces amendments to FINRA Rule 4515.01 (Allocations of Orders Made by Investment Advisers). The change eliminates the requirement that a principal review and approve allocations of bulk investment adviser orders when the allocation instructions arrive after trade date. The amendments take effect Nov. 16, 2026.

Why it matters: Rule 4515 requires a member to identify the account for a customer order before execution, and generally requires a qualified principal to authorize a change of account and to document the facts relied on. Rule 4515.01 already exempted orders a member receives from an investment adviser (IA) for more than one customer account, known as IA bulk orders, if the IA’s allocation instructions arrive by the end of trade date. The amendment extends that exception to all IA bulk orders, whenever instructions are received. It covers outside advisers and associated persons of a member who provide advisory services for the member.

The big picture: FINRA says the change comes from the shorter settlement cycle, which leaves advisers less time to send allocation instructions. Most instructions reach members by the end of trade date and already fall outside the principal-approval requirement, but some do not. FINRA says removing the requirement avoids operational burdens that can delay allocation processing, along with the risks that delay creates.

The notice describes the change as part of the FINRA Forward initiative to modernize FINRA’s rules, guidance and processes and to empower member compliance. The SEC approved the filing, SR-FINRA-2026-016, on Sept. 2, 2026, and the order was published in the Federal Register on Sept. 8.

Investor protections are meant to stay intact. The rule still bars firms from knowingly facilitating allocations that conflict with both the adviser’s intent at execution to allocate shares on a percentage basis and the adviser’s fiduciary duty to the participating accounts. That prohibition extends to allocations based on how a trade performed between execution and allocation. Firms are also reminded of Exchange Act Rule 15c6-2(a), which generally requires broker-dealers to ensure allocations are completed as soon as technologically practicable and no later than the end of trade date, through written agreements or reasonably designed written policies and procedures.

What’s next: Members that handle adviser bulk orders should update their supervisory procedures before Nov. 16. The notice routes questions to attorneys in FINRA’s Office of General Counsel, Afshin Atabaki at (202) 728-8902 and Britny Auletti at (212) 858-4039, and attaches the rule text as Attachment A.