SEC Approves FINRA Rule Change Expanding IA Bulk Order Allocation Exception

On July 9, 2026 FINRA filed a proposed rule change with the SEC under Section 19(b)(1) of the Exchange Act to amend FINRA Rule 4515.01. The notice was published for comment on July 21, 2026, and the Commission received no comments. The SEC's order dated September 2, 2026 approves the amendment.

FINRA Rule 4515 requires principal approval and written documentation for any change in account name or designation before execution. Rule 4515.01 currently provides an exception for bulk investment adviser (IA) orders when allocation instructions are received no later than the end of the trade date. The approved amendment removes the phrase "provided that members receive specific account designations or customer names ... by no later than the end of the day on the trade date" and replaces it with "without the principal approval required by this Rule," thereby extending the exception to all IA bulk orders regardless of when instructions arrive.

The Commission found the change consistent with the Exchange Act, including Section 15A(b)(6), noting that it eliminates operational burdens that could delay allocation processing and increase settlement risk while preserving investor-protection safeguards. The Commission also referenced the shift to T+1 settlement, which became effective May 28, 2024, and the prevalence of straight-through processing (STP) as supporting factors.

Despite the expanded exception, the Commission highlighted that existing safeguards remain. Rule 15c6-2(a) still requires broker-dealers to enter written agreements and maintain policies ensuring allocation, confirmation, and affirmation are completed as soon as technologically practicable and no later than the trade-date end. Rule 17Ad-27 continues to obligate clearing agencies to develop policies facilitating STP of securities transactions.