FINRA Rule 3270: outside business activity notice for referral income

Do registered reps need to notify their firm about referral income?

Generally yes. FINRA Rule 3270 requires a registered person to give the member firm prior written notice before engaging in an outside business activity, and a referral partner role that pays compensation is the kind of activity firms review. The rule is changing: the SEC approved new FINRA Rule 3290 (Outside Activities), which replaces Rules 3270 and 3280, and until FINRA announces the effective date, Rules 3270 and 3280 continue to apply.

This matters most to boutique investment bankers and M&A advisors who are registered through a broker-dealer. If you are not registered with a FINRA member, none of this applies to you, but your own engagement letters and partners' policies might.

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

What changed with Rule 3290

FINRA reported that the SEC approved Rule 3290 on September 15, 2026, with an effective date to be announced in a Regulatory Notice. According to FINRA's weekly archive, the new rule folds outside business activities and private securities transactions into one rule and eliminates reporting of non-investment-related activities.

Two practical points follow.

• Until the effective date is announced, treat 3270 (outside business activities) and 3280 (private securities transactions) as the operative rules.
• After the effective date, the notice question may turn on whether the activity is investment-related. Your firm's compliance team decides how it applies the new text.

Why a referral partner role can be an outside activity

An outside business activity is work done outside the relationship with your firm for compensation or in expectation of compensation. A reward from SourceX is compensation. Whether the role relates to securities is a separate question: SourceX introductions concern licensing operational records, not offering securities, but your firm may still want to see it.

Three adjacent issues come up in conversation with compliance.

The statutory exemption for some M&A brokers does not remove FINRA obligations for people who keep registrations. Industry commentary from Finalis makes this point: individuals who stay registered remain subject to FINRA rules and their firm's policies on outside activities. Our page on the M&A broker exemption explains what that exemption does and does not cover.

Notice checklist before you register as a partner

• Confirm whether you are an associated person of a FINRA member, including a dual registrant or a firm affiliate
• Read your firm's written supervisory procedures on outside activities and private securities transactions
• Write a plain description: role, who pays, how the reward is calculated and when it is paid
• State what you will not do: handle client records, negotiate terms, or sell or offer any security
• Submit the notice through your firm's channel and wait for written acknowledgment or approval
• Ask whether the firm wants the activity disclosed to clients you advise
• Ask how the firm will handle the change from 3270 to 3290
• Keep the approval with your records and refresh it if the arrangement changes

When to raise it

What to say to your compliance officer

How rewards work

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. The reward is paid only after the buyer pays and SourceX receives its fee; an introduction, meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. The reward is a share of SourceX's fee and is never deducted from what the company receives. Read the program terms so your description to compliance matches the signed agreement, and use the company fit checker to keep introductions to companies that fit.

When not to proceed

• Your firm declines the notice or tells you to stop.
• The introduction would involve a client you advise on a securities transaction and compliance has not cleared the overlap.
• You cannot describe the role without referring to securities.

State CPA rules can apply too if you hold a license; see the New York and Washington pages for examples of how they differ.

Questions to ask compliance

• Does the firm treat a data-licensing referral role as an outside business activity, a private securities transaction, or neither?
• Does the firm want the activity disclosed to clients I advise on a sale or financing?
• Are there categories of company, such as clients in an active sell-side mandate, where the firm will not allow introductions?
• How long does review normally take, and who gives the written acknowledgment?
• Will the firm update its procedures when Rule 3290 takes effect, and how will I be told?

Common mistakes

Next step

Send your compliance team the description above, and once you hold written acknowledgment, register as a partner. M&A advisors can read the wider referral overview for M&A advisors before they do.