BackText onlyPrint

You need the Flash plugin.

Download Macromedia Flash Player



  • By-Laws of FINRA Regulation, Inc.

    • ARTICLE I DEFINITIONS

      When used in these By-Laws, unless the context otherwise requires, the term:
      (a) "Act" means the Securities Exchange Act of 1934, as amended;
      (b) "Board" means the Board of Directors of FINRA Regulation;
      (c) "broker" shall have the same meaning as in Section 3(a)(4) of the Act;
      (d) "Commission" means the Securities and Exchange Commission;
      (e) "Corporation" means the Financial Industry Regulatory Authority, Inc., the National Association of Securities Dealers, Inc., or any future name of the entity;
      (f) "day" means calendar day;
      (g) "dealer" shall have the same meaning as in Section 3(a)(5) of the Act;
      (h) "Delaware law" means the General Corporation Law of the State of Delaware;
      (i) "Delegation Plan" means the "Plan of Allocation and Delegation of Functions by FINRA to FINRA Regulation, Inc." as approved by the Commission, and as amended from time to time;
      (j) "Director" means a member of the Board;
      (k) "district" means a district established by the Board pursuant to Article VIII, Section 8.1 of these By-Laws;
      (l) "District Director" means a FINRA Regulation staff member who heads a district office;
      (m) "district office" means an office of FINRA Regulation located in a district;
      (n) "Electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process;
      (o) "Executive Representative" means the executive representative of a FINRA member appointed pursuant to Article IV, Section 3 of the FINRA By-Laws;
      (p) "FINRA" means the Financial Industry Regulatory Authority, Inc.;
      (q)"FINRA Board" means the FINRA Board of Governors;
      (r) "FINRA member" means any broker or dealer admitted to membership in FINRA. For purposes of the Code of Arbitration Procedure for Customer Disputes or the Code of Arbitration Procedure for Industry Disputes, FINRA members include any broker or dealer admitted to membership in FINRA whether or not the membership has been terminated or cancelled; and any broker or dealer admitted to membership in a self-regulatory organization that, with FINRA consent, has required its members to arbitrate pursuant to the Code of Arbitration Procedure for Customer Disputes or the Code of Arbitration Procedure for Industry Disputes and/or to be treated as members of FINRA for purposes of the Codes of Arbitration Procedure, whether or not the membership has been terminated or cancelled;
      (s) "FINRA Regulation" means FINRA Regulation, Inc.;
      (t) “Governor” means a member of the FINRA Board;
      (u) "Independent Agent" means a corporation or entity selected by the Secretary of FINRA or FINRA Regulation to assist FINRA Regulation with nomination and election procedures under Articles VI and VIII of these By-Laws and the representatives of such corporation or entity;
      (v) "Industry Director" means a Director of the Board (other than the Chairman of the FINRA Board and the Chief Executive Officer of FINRA) who (1) is or has served in the prior year as an officer, director (other than as an independent director), employee, or controlling person of a broker or dealer, or (2) has a consulting or employment relationship with or provides professional services to a self-regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
      (w) “Industry Member” means a National Adjudicatory Council or committee member who (1) is or has served in the prior year as an officer, director, employee, or controlling person of a broker or dealer, excluding an independent director, an outside director, or a director not engaged in the day-to-day management of a broker or dealer; (2) is an officer, director (excluding an outside director), or employee of an entity that owns more than ten percent of the equity of a broker or dealer, and the broker or dealer accounts for more than five percent of the gross revenues received by the consolidated entity; (3) owns more than five percent of the equity securities of any broker or dealer, whose investments in brokers or dealers exceed ten percent of his or her net worth, or whose ownership interest otherwise permits him or her to be engaged in the day-to-day management of a broker or dealer; (4) provides professional services to brokers or dealers, and such services constitute 20 percent or more of the professional revenues received by the member or 20 percent or more of the gross revenues received by the member's firm or partnership (for the purposes of determining membership on the National Arbitration and Mediation Committee, any services provided in the capacity as a mediator of disputes involving a broker or dealer and not representing any party in such mediations shall not be considered professional services provided to brokers or dealers); (5) provides professional services to a director, officer, or employee of a broker, dealer, or corporation that owns 50 percent or more of the voting stock of a broker or dealer, and such services relate to the director's, officer's, or employee's professional capacity and constitute 20 percent or more of the professional revenues received by the member or 20 percent or more of the gross revenues received by the member's firm or partnership (for the purposes of determining membership on the National Arbitration and Mediation Committee, any services provided in the capacity as a mediator of disputes involving a director, officer, or employee as described in this subsection (5) and not representing any party in such mediations shall not be considered professional services provided to such individuals); or (6) has a consulting or employment relationship with or provides professional services to a self-regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
      (x) “Large Firm” means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has 500 or more registered persons;
      (y) “Large Firm NAC Member” or “Large Firm Committee Member” means a National Adjudicatory Council or committee member that must, in order to be eligible to serve, be an Industry Member and, at the time of election or appointment, must be registered with a member which is a Large Firm;
      (z) “Mid-Size Firm” means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 151 and no more than 499 registered persons;
      (aa) “Mid-Size Firm NAC Member” or “Mid-Size Firm Committee Member” means a National Adjudicatory Council or committee member that must, in order to be eligible to serve, be an Industry Member and, at the time of election or appointment, must be registered with a member which is a Mid-Size Firm;
      (bb) "National Adjudicatory Council" or “NAC” means a body appointed pursuant to Article V of these By-Laws.
      (cc) "Nominating Committee" means the Nominating Committee appointed pursuant to Article VII, Section 9 of the FINRA By-Laws;
      (dd) "Non-Industry Member" means a National Adjudicatory Council or committee member who is (1) a Public Member; (2) an officer or employee of an issuer of securities listed on a market for which FINRA provides regulation; (3) an officer or employee of an issuer of unlisted securities that are traded in the over-the-counter market; or (4) any other individual who would not be an Industry Member;
      (ee) "person associated with a member" or "associated person of a member" means: (1) a natural person who is registered or has applied for registration under the Rules of the Corporation; (2) a sole proprietor, partner, officer, director, or branch manager of a member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a member, whether or not any such person is registered or exempt from registration with FINRA under these By-Laws or the Rules of the Corporation; and (3) for purposes of Rule 8210, any other person listed in Schedule A of Form BD of a member;
      (ff) "Public Director" means a Director of the Board who is not an Industry Director and who otherwise has no material business relationship with a broker or dealer or a self-regulatory organization registered under the Act (other than serving as a public director of such a self-regulatory organization);
      (gg) “Public Member” means a National Adjudicatory Council or committee member who has no material business relationship with a broker or dealer or a self-regulatory organization registered under the Act (other than serving as a public director or a public member on a committee of such a self-regulatory organization or, for the purposes of determining membership on the National Arbitration and Mediation Committee, acting in the capacity as a mediator of disputes involving a broker or dealer and not representing any party in such mediations);
      (hh) “Regional Committee” means a Regional Committee elected pursuant to Article VIII of these By-Laws;
      (ii) “Rules of the Corporation” or “Rules” means the numbered rules set forth in the Manual of the Corporation beginning with the Rule 0100 Series, as adopted by the FINRA Board pursuant to the FINRA By-Laws, as hereafter amended or supplemented;
      (jj) “Small Firm” means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least one and no more than 150 registered persons; and
      (kk) “Small Firm NAC Member” or “Small Firm Committee Member” means a National Adjudicatory Council or committee member that must, in order to be eligible to serve, be an Industry Member and, at the time of election or appointment, must be registered with a member which is a Small Firm.
      Amended by SR-FINRA-2018-021 eff. May 18, 2018.
      Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
      Amended by SR-FINRA-2011-011 eff. April 28, 2011.
      Amended by SR-FINRA-2008-046. eff. Nov. 6, 2008.
      Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
      Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
      Amended by SR-NASD-01-13 eff. May 12, 2001.
      Amended by SR-NASD-99-21 eff. July 9, 2000.
      Amended by SR-NASD-99-35 eff. Dec. 1, 1999.
      Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
      Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      Selected Notice: 99-95, 16-04

    • ARTICLE II OFFICES

      • Location

        Sec. 2.1  The address of the registered office of FINRA Regulation in the State of Delaware and the name of the registered agent at such address shall be: Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. FINRA Regulation also may have offices at such other places both within and without the State of Delaware as the Board may from time to time designate or the business of FINRA Regulation may require.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notices: 16-04

      • Change of Location

        Sec. 2.2  In the manner permitted by law, the Board or the registered agent may change the address of FINRA Regulation's registered office in the State of Delaware and the Board may make, revoke, or change the designation of the registered agent.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE III MEETINGS OF THE STOCKHOLDER

      • Action by Consent of Stockholder

        Sec. 3.1  Any action required or permitted by law to be taken at any meeting of the stockholder of FINRA Regulation may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holder of the outstanding stock.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE IV BOARD OF DIRECTORS

      • General Powers

        Sec. 4.1  The property, business, and affairs of FINRA Regulation shall be managed by or under the direction of the Board. The Board may exercise all such powers of FINRA Regulation and have the authority to perform all such lawful acts as are permitted by law, the Restated Certificate of Incorporation, these By-Laws, or the Delegation Plan to assist FINRA in fulfilling its self-regulatory responsibilities as set forth in Section 15A of the Act, and to support such other initiatives as the Board may deem appropriate. To the fullest extent permitted by applicable law, the Restated Certificate of Incorporation, and these By-Laws, the Board may delegate any of its powers to a committee appointed pursuant to Section 4.13 or to FINRA Regulation staff in a manner not inconsistent with the Delegation Plan.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Number of Directors

        Sec. 4.2  The Board shall consist of no fewer than five and no more than seventeen Directors, the exact number of Board members will be determined by resolution adopted by the stockholder of FINRA Regulation from time to time. Any new Director position created as a result of an increase in the size of the Board shall be filled pursuant to Section 4.4.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
        Amended by SR-NASD-00-43 eff. July 21, 2000.
        Amended by SR-NASD-99-10 eff. Feb. 8, 1999.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notices: 09-39, 16-04.

      • Qualifications

        Sec. 4.3  (a) The Board shall consist exclusively of members of the FINRA Board. The number of Public Directors shall exceed the number of Industry Directors. The Chairman of the FINRA Board and the Chief Executive Officer of FINRA shall be ex-officio non-voting members of the Board. At least two, and not less than 20%, of the Directors shall be Small Firm, Mid-Size Firm, or Large Firm Governors. The terms "Small Firm Governor," "Mid-Size Firm Governor," and "Large Firm Governor" are defined as specified in the FINRA By-Laws. Ex-officio non-voting members of the Board shall not be counted as Board members for purposes of this section.
        (b) Contemporaneous with the annual election of Directors, the stockholder of FINRA Regulation shall designate from the elected Directors a Chair and such other persons having such titles as it shall deem necessary or advisable to serve until the next annual election or until their successors are chosen and qualify. The persons so elected shall have such powers and duties as may be determined from time to time by the Board. The Board, by resolution adopted by a majority of Directors then in office, may remove any such person from such position at any time.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
        Amended by SR-NASD-99-10 eff. Feb. 8, 1999.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Election

        Sec. 4.4  Except as otherwise provided by law, these By-Laws, or the Delegation Plan, Directors of FINRA Regulation shall be elected each year at the annual meeting of the stockholder, or at a special meeting called for such purpose in lieu of the annual meeting. If the annual election of Directors is not held on the date designated therefor, the Directors shall cause such election to be held as soon thereafter as convenient.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Resignation

        Sec. 4.5  Any Director may resign at any time either upon written notice of resignation to the Chair of the Board or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Removal

        Sec. 4.6  Any or all of the Directors may be removed from office at any time, with or without cause by the stockholder of FINRA Regulation.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Disqualification

        Sec. 4.7  The term of office of a Director shall terminate immediately upon a determination by the Board, by a majority vote of the remaining Directors, that: (a) the Director no longer satisfies the classification for which the Director was elected; and (b) the Director's continued service as such would violate the compositional requirements of the Board set forth in Section 4.3. If the term of office of a Director terminates under this Section, and the remaining term of office of such Director at the time of termination is not more than six months, during the period of vacancy the Board shall not be deemed to be in violation of the provisions of Section 4.3 requiring that the number of Public Directors exceed the number of Industry Directors by virtue of such vacancy and no violation of the provisions of Section 4.3 regarding the number of Small Firm, Mid-Size Firm, and Large Firm Governors shall be deemed to have occurred.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Filling of Vacancies

        Sec. 4.8  If a Director position becomes vacant, whether because of death, disability, disqualification, removal, or resignation, the Nominating Committee shall nominate, and the FINRA Board shall, by majority vote, cause the election of a person satisfying the qualifications for the directorship as provided in Section 4.3 to fill such vacancy, except that if the remaining term of office for the vacant Director position is not more than six months, no replacement shall be required.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Quorum and Voting

        Sec. 4.9  (a) At all meetings of the Board, unless otherwise set forth in these By-Laws or required by law, a quorum for the transaction of business shall consist of a majority of the Board, including not less than 50 percent of the Public Directors. In the absence of a quorum, a majority of the Directors present may adjourn the meeting until a quorum is present.
        (b) The vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Regulation

        Sec. 4.10  The Board may adopt such rules, regulations, and requirements for the conduct of the business and management of FINRA Regulation not inconsistent with the law, the Restated Certificate of Incorporation, these By-Laws, the Delegation Plan, the Rules of the Corporation, or the By-Laws of FINRA, as the Board may deem proper. A Director shall, in the performance of such Director's duties, be fully protected in relying in good faith upon the books of account or reports made to FINRA Regulation by any of its officers, by an independent certified public accountant, by an appraiser selected with reasonable care by the Board or any committee of the Board or by any agent of FINRA Regulation, or in relying in good faith upon other records of FINRA Regulation.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notices: 09-39, 16-04.

      • Meetings

        Sec. 4.11  (a) An annual meeting of the Board shall be held for the purpose of organization, election of officers, and transaction of any other business. If such meeting is held promptly after and at the place specified for the annual meeting of the stockholder, no notice of the annual meeting of the Board need be given. Otherwise, such annual meeting shall be held at such time and place as may be specified in a notice given in accordance with Section 4.12.
        (b) Regular meetings of the Board may be held at such time and place, within or without the State of Delaware, as determined from time to time by the Board. After such determination has been made, notice shall be given in accordance with Section 4.12.
        (c) Special meetings of the Board may be called by the Chair of the Board or by at least one-third of the Directors then in office. Notice of any special meeting of the Board shall be given to each Director in accordance with Section 4.12.
        (d) A Director or member of any committee appointed by the Board may participate in a meeting of the Board or of such committee through the use of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may hear one another, and such participation in a meeting shall constitute presence in person at such meeting for all purposes.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Notice of Meetings; Waiver of Notice

        Sec. 4.12  (a) Notice of any meeting of the Board shall be deemed to be duly given to a Director if: (i) mailed to the address last made known in writing to FINRA Regulation by such Director as the address to which such notices are to be sent, at least seven days before the day on which such meeting is to be held; (ii) sent to the Director at such address by electronic transmission not later than the day before the day on which such meeting is to be held; or (iii) delivered to the Director personally or orally, by telephone or otherwise, not later than the day before the day on which such meeting is to be held. Each notice shall state the time and place of the meeting and the purpose(s) thereof.
        (b) Notice of any meeting of the Board need not be given to any Director if waived by that Director in writing or by electronic transmission whether before or after the holding of such meeting, or if such Director is present at such meeting, subject to Article XII, Section 12.3(b).
        (c) Any meeting of the Board shall be a legal meeting without any prior notice if all Directors then in office shall be present thereat, subject to Article XII, Section 12.3(b) of these By-Laws.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Committees

        Sec. 4.13  (a) The Board may, by resolution or resolutions adopted by a majority of the whole Board, appoint one or more committees. Except as herein provided, vacancies in membership of any committee shall be filled by the vote of a majority of the whole Board. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member. Members of a committee shall hold office for such period as may be fixed by a resolution adopted by a majority of the whole Board. Any member of a committee may be removed from such committee only after a majority vote of the whole Board, after appropriate notice, for refusal, failure, neglect, or inability to discharge such member's duties.
        (b) The Board may, by resolution or resolutions adopted by a majority of the whole Board, delegate to one or more committees the power and authority to act on behalf of the Board in carrying out the functions and authority delegated to FINRA Regulation by FINRA under the Delegation Plan. Such delegations shall be in conformance with applicable law, the Restated Certificate of Incorporation, these By-Laws, and the Delegation Plan. Action taken by a committee pursuant to such delegated authority shall be subject to review, ratification, or rejection by the Board. In all other matters, the Board may, by resolution or resolutions adopted by a majority of the whole Board, delegate to one or more committees that consist solely of one or more Directors the power and authority to act on behalf of the Board in the management of the business and affairs of FINRA Regulation to the extent permitted by law and not inconsistent with the Delegation Plan. A committee, to the extent permitted by law and provided in the resolution or resolutions creating such committee, may authorize the seal of FINRA Regulation to be affixed to all papers that may require it.
        (c) Except as otherwise permitted by applicable law, no committee shall have the power or authority of the Board with regard to: amending the Restated Certificate of Incorporation or the By-Laws of FINRA Regulation; adopting an agreement of merger or consolidation; recommending to the stockholder the sale, lease, or exchange of all or substantially all FINRA Regulation's property and assets; or recommending to the stockholder a dissolution of FINRA Regulation or a revocation of a dissolution. Unless the resolution of the Board expressly so provides, no committee shall have the power or authority to authorize the issuance of stock.
        (d) Each committee may adopt its own rules of procedure and may meet at stated times or on such notice as such committee may determine. Each committee shall keep regular minutes of its proceedings and report the same to the Board when required.
        (e) Unless otherwise provided by these By-Laws, a majority of a committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of such committee present at a meeting at which a quorum is present shall be an act of such committee.
        (f) The Board may appoint an Executive Committee, which shall, to the fullest extent permitted by Delaware law and other applicable law, have and be permitted to exercise all the powers and authority of the Board in the management of the business and affairs of FINRA Regulation between meetings of the Board, and which may authorize the seal of FINRA Regulation to be affixed to all papers that may require it. The Executive Committee shall consist of three or four Directors. The number of Public Directors shall exceed the number of Industry Directors. An Executive Committee member shall hold office for a term of one year. At all meetings of the Executive Committee, a quorum for the transaction of business shall consist of a majority of the Executive Committee, including not less than 50 percent of the Public Directors. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
        (g) The Board may appoint a Finance Committee. The Finance Committee shall advise the Board with respect to the oversight of the financial operations and conditions of FINRA Regulation, including recommendations for FINRA Regulation's annual operating and capital budgets and proposed changes to the rates and fees charged by FINRA Regulation. The Finance Committee shall consist of three or four Directors. A Finance Committee member shall hold office for a term of one year.
        (h) Upon request of the Secretary of FINRA Regulation, each prospective committee member who is not a Director shall provide to the Secretary such information as is reasonably necessary to serve as the basis for a determination of the prospective committee member's classification as an Industry, Non-Industry or Public Member. The Secretary of FINRA Regulation shall certify to the Board each prospective committee member's classification. Such committee members shall update the information submitted under this Section at least annually and upon request of the Secretary of FINRA Regulation, and shall report immediately to the Secretary any change in such classification.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-2001-57 eff. Sept. 12, 2001.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Conflicts of Interest; Contracts and Transactions Involving Directors

        Sec. 4.14  (a) A Director or a National Adjudicatory Council or committee member shall not directly or indirectly participate in any adjudication of the interests of any party if that Director or National Adjudicatory Council or committee member has a conflict of interest or bias, or if circumstances otherwise exist where his or her fairness might reasonably be questioned. In any such case, the Director or National Adjudicatory Council or committee member shall recuse himself or herself or shall be disqualified in accordance with the Rules of the Corporation.
        (b) No contract or transaction between FINRA Regulation and one or more of its Directors or officers, or between FINRA Regulation and any other corporation, partnership, association, or other organization in which one or more of its Directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason if: (i) the material facts pertaining to such Director's or officer's relationship or interest and the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested Directors; (ii) the material facts are disclosed or become known to the Board or committee after the contract or transaction is entered into, and the Board or committee in good faith ratifies the contract or transaction by the affirmative vote of a majority of the disinterested Directors; or (iii) the material facts pertaining to the Director's or officer's relationship or interest and the contract or transaction are disclosed or are known to the stockholder entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholder. Only disinterested Directors may be counted in determining the presence of a quorum at the portion of a meeting of the Board or of a committee that authorizes the contract or transaction. This subsection shall not apply to a contract or transaction between FINRA Regulation and FINRA.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-2006-104 eff. Dec. 20, 2006.
        Amended by SR-NASD-2006-135 eff. Dec. 20, 2006.
        Amended by SR-NASD-2004-110 eff. Dec. 31, 2004.
        Amended by SR-NASD-98-56 eff. Oct. 30, 1998.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39, 16-04.

      • Action Without Meeting

        Sec. 4.15  Any action required or permitted to be taken at a meeting of the Board or of a committee may be taken without a meeting if all Directors or all members of such committee, as the case may be, consent thereto in accordance with applicable law.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Communication of Views Regarding Contested Election or Nomination

        Sec. 4.16  (a) FINRA Regulation, the Board, any committee, the National Adjudicatory Council, and FINRA Regulation staff shall not take any position publicly or with a FINRA member or person associated with or employed by a member with respect to any candidate in a contested election or nomination held pursuant to these By-Laws or the FINRA By-Laws. A Director, committee member (other than the Nominating Committee) or National Adjudicatory Council member may communicate his or her views with respect to a candidate if such Director or committee or National Adjudicatory Council member acts solely in his or her individual capacity and disclaims any intention to communicate in any official capacity on behalf of FINRA Regulation, the Board, the National Adjudicatory Council, or any committee (other than the Nominating Committee). Except as provided herein, any candidate and his or her representatives may communicate support for the candidate to a member or person associated with or employed by a member.
        (b) In a contested election, the Nominating Committee may support its nominee by sending to members eligible to vote up to two mailings of materials in support of its nominees in lieu of mailings sent by its candidates pursuant to these By-Laws. In addition to such mailings, in the event of mailings or other communications to members by or on behalf of a candidate by petition in a contested election, the Nominating Committee may respond in-kind, but shall not take a position unresponsive to the contesting candidate's communications.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE V NATIONAL ADJUDICATORY COUNCIL

      • Authority

        Sec. 5.1  The National Adjudicatory Council may be authorized to act for the FINRA Board in a manner consistent with these By-Laws, the Rules of the Corporation, and the Delegation Plan with respect to an appeal or review of a disciplinary proceeding, a statutory disqualification proceeding, or a membership proceeding; a review of an offer of settlement, a letter of acceptance, waiver, and consent, and a minor rule violation plan letter; the exercise of exemptive authority; and such other proceedings or actions authorized by the Rules of the Corporation. The National Adjudicatory Council also shall consider and make recommendations to the FINRA Board on policy and rule changes relating to the business and sales practices of FINRA members and associated persons and enforcement policies, including policies with respect to fines and other sanctions. The FINRA Board may delegate such other powers and duties to the National Adjudicatory Council as the FINRA Board deems appropriate in a manner not inconsistent with the Delegation Plan.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Number of Members and Qualifications

        Sec. 5.2  (a) The National Adjudicatory Council shall consist of 15 members. The number of Non-Industry Members, including at least three Public Members, shall exceed the number of Industry Members. Industry Members shall include two Small Firm NAC Members, one Mid-Size Firm NAC Member, two Large Firm NAC Members, and two at-large Industry Members. The at-large Industry Members shall be appointed to the NAC without being designated as Small, Mid-Size, or Large Firm NAC Members.
        (b) The incumbent National Adjudicatory Council shall elect a Chair and a Vice Chair from among the members serving during the following term. The Chair and Vice Chair shall have such powers and duties as may be determined from time to time by the National Adjudicatory Council. The FINRA Board, by resolution adopted by a majority of Governors then in office, may remove the Chair or Vice Chair from such position at any time for refusal, failure, neglect, or inability to discharge his or her duties.
        Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2007-023 eff. July 30, 2007.
        Amended by SR-NASD-99-36 eff. Aug. 4, 1999.
        Amended by SR-NASD-98-36 eff. July 15, 1998.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 16-27

      • Appointments

        Sec. 5.3  The FINRA Board shall appoint a National Adjudicatory Council and all its members. The at-large Industry and Non-Industry Members of the NAC shall be appointed by the FINRA Board from candidates recommended by the Nominating Committee. The Small Firm, Mid-Size Firm and Large Firm NAC Members also shall be appointed by the FINRA Board from candidates recommended by the Nominating Committee, but in the event of a contested election, the Small Firm, Mid-Size Firm and Large Firm NAC Members shall be elected by the membership by a plurality of the votes of the members entitled to vote for such category in accordance with the provisions of these By-Laws and thereafter appointed by the FINRA Board.

        Adopted by SR-FINRA-2008-046 eff. Nov. 6, 2008.

      • Nomination Process

        Sec. 5.4  The Secretary of the Corporation shall collect from each nominee for the office of member of the National Adjudicatory Council such information as is reasonably necessary to serve as the basis for a determination of the nominee's classification as an Industry, Small Firm, Mid-Size Firm, Large Firm, Non-Industry, or Public Member, and the Secretary shall certify to the Nominating Committee each nominee's classification. After appointment to the National Adjudicatory Council, each member shall update such information at least annually and upon request of the Secretary, and shall report immediately to the Secretary any change in such classification.
        Renumbered from Sec. 5.3 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-98-36 eff. July 15, 1998.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Rejection of Nominating Committee Nominee

        Sec. 5.5  If the FINRA Board rejects the nominee of the Nominating Committee, the Nominating Committee shall repeat the nomination procedures in Sections 5.2 though 5.4. The FINRA Board may not reject Small Firm, Mid-Size Firm and Large Firm NAC Members elected in accordance with the provisions of Article VI.
        Adopted by SR-FINRA-2008-046 eff. Nov. 6, 2008.

      • Term of Office

        Sec. 5.6  (a) After a transitional period beginning in January 2017 and ending in December 2019, during which members may be appointed to terms of office necessary to achieve the requirements of Section 5.6(b) of this Article, each National Adjudicatory Council member shall hold office for a term of four years or until a successor is duly appointed and qualified, except in the event of earlier termination from office by reason of death, resignation, removal, disqualification, or other reason.
        (b) The NAC shall be divided into four classes, as equal in number as practicable, with terms of office that commence and expire on a staggered, annual basis.
        (c) No member may serve consecutive terms, except that if a member is appointed to fill a term of less than one year, such member may serve a single four year term following the expiration of such member's initial term.
        Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
        Renumbered from Sec. 5.4 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2001-74 eff. Oct. 17, 2001.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 16-27

      • Resignation

        Sec. 5.7  A member of the National Adjudicatory Council may resign at any time upon written notice of resignation to the FINRA Board. Any such resignation shall take effect at the time specified therein, or if the time is not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.
        Renumbered from Sec. 5.5 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Removal

        Sec. 5.8  Any or all of the members of the National Adjudicatory Council may be removed from office at any time for refusal, failure, neglect, or inability to discharge the duties of such office by majority vote of the FINRA Board.
        Renumbered from Sec. 5.6 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Disqualification

        Sec. 5.9  Notwithstanding Section 5.6, the term of office of a National Adjudicatory Council member shall terminate immediately upon a determination by the FINRA Board, by a majority vote, that: (a) the member no longer satisfies the classification (Industry, Non-Industry, or Public member) for which the member was appointed or elected; and (b) the member's continued service as such would violate the compositional requirements of the National Adjudicatory Council set forth in Section 5.2. If the term of office of a National Adjudicatory Council member terminates under this Section, and the remaining term of office of such member at the time of termination is not more than six months, during the period of vacancy the National Adjudicatory Council shall not be deemed to be in violation of the compositional requirements of Section 5.2 by virtue of such vacancy.
        Renumbered from Sec. 5.7 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Filling of Vacancies

        Sec. 5.10  If a position on the National Adjudicatory Council becomes vacant, whether because of death, disability, disqualification, removal, or resignation, the Nominating Committee shall nominate, and the FINRA Board shall appoint a person satisfying the classification (Industry, Non-Industry, or Public) for the position as provided in Section 5.2(a) to fill such vacancy, except that if the remaining term of office for the vacant position is not more than six months, no replacement shall be required and no violation of the compositional requirements of Section 5.2 shall be deemed to have occurred. For any vacancy of a seat on the National Adjudicatory Council for which the remaining term of office is more than six months, such vacancy shall be filled in accordance with Articles V and VI of these By-Laws, and, during this process, no violation of the compositional requirements of Section 5.2 shall be deemed to have occurred.
        Renumbered from Sec. 5.8 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Quorum and Voting

        Sec. 5.11  At all meetings of the National Adjudicatory Council, a quorum for the transaction of business shall consist of a majority of the National Adjudicatory Council, including not less than 50 percent of the Non-Industry members. In the absence of a quorum, a majority of the members present may adjourn the meeting until a quorum is present.
        Renumbered from Sec. 5.9 by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Meetings

        Sec. 5.12  The members of the National Adjudicatory Council may participate in a meeting through the use of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may hear one another, and such participation in a meeting shall constitute presence in person at such meeting for all purposes.
        Renumbered from Sec. 5.10 by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Review Subcommittee

        Sec. 5.13  The National Adjudicatory Council shall appoint a Review Subcommittee to determine whether disciplinary and membership proceedings decisions should be called for review by the National Adjudicatory Council under the Rules of the Corporation and to perform any other function authorized by the Rules of the Corporation. The Review Subcommittee shall be composed of no fewer than two and no more than four members of the National Adjudicatory Council. The number of Non-Industry Members shall equal or exceed the number of Industry Members. At all meetings of the Review Subcommittee, a quorum for the transaction of business shall consist of not less than 50 percent of the members of the Review Subcommittee, including not less than 50 percent of the Non-Industry Members.
        Renumbered from Sec. 5.11 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE VI SELECTION OF SMALL FIRM, MID-SIZE FIRM AND LARGE FIRM INDUSTRY MEMBERS OF THE NATIONAL ADJUDICATORY COUNCIL

      • Identification of Candidates

        Sec. 6.1  The Nominating Committee shall nominate one or more candidates for appointment by the FINRA Board for any open Small Firm, Mid-Size Firm and Large Firm Industry Member seats on the National Adjudicatory Council.
        Renumbered from Sec. 6.11 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Designation of Additional Candidates

        Sec. 6.2  The Corporation shall notify the members of the names of each nominee selected by the Nominating Committee for open National Adjudicatory Council seats that are Small Firm, Mid-Size Firm, and Large Firm seats, the qualifications of the nominee, and such other information regarding each nominee as the Nominating Committee deems pertinent. A person who has not been so nominated may be included on a ballot for an election to fill an open Small Firm, Mid-Size Firm or Large Firm seat on the National Adjudicatory Council if: (a) within 45 days after the date of such notice, such person presents to the Secretary of the Corporation (i) in the case of petitions solely in support of such person, petitions in support of his or her nomination duly executed by three percent of the members entitled to vote (based on firm size classification) for such nominee’s election, and no such member shall endorse more than one such nominee, or (ii) in the case of petitions in support of more than one person, petitions in support of the nominations of such persons duly executed by ten percent of the members entitled to vote (based on firm size classification) for such nominees’ election; and (b) the Secretary certifies that (i) the petitions are duly executed by the Executive Representatives of the requisite number of members entitled to vote for such nominee’s/nominees’ election, and (ii) the person(s) satisfies/satisfy the classification (Large Firm, Mid-Size Firm or Small Firm) of the National Adjudicatory Council seat to be filled, based on such information provided by the person(s) as is reasonably necessary to make the certification. Only an Executive Representative may sign a petition on behalf of a FINRA member. The Secretary shall not unreasonably withhold or delay the certification. Upon certification, the election shall be deemed a contested election with respect to the NAC seat for which the nomination relates
        Renumbered from Sec. 6.13 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • List of FINRA Members Eligible to Vote

        Sec. 6.3  (a) The Secretary of the Corporation shall mail a list of all FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws and the names of their Executive Representatives to the additional candidate immediately following receipt of the additional candidate's notice by the Secretary of the Corporation.
        (b) A FINRA member that meets the firm size classification (Small Firm, Mid-Size Firm, or Large Firm) of the open seat on the NAC shall be eligible to cast one vote on the nomination through the FINRA member's Executive Representative.
        Renumbered from Sec. 6.14 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Uncontested Nomination

        Sec. 6.4  If the Nominating Committee proposes one candidate for nomination and no additional candidate is proposed for nomination pursuant to Section 6.2, the Nominating Committee shall nominate its candidate to the FINRA Board.
        Renumbered from Sec. 6.16 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Notice of Contested Nomination

        Sec. 6.5  If the Nominating Committee proposes more than one candidate for nomination for an open Industry Member seat, or if an additional candidate is proposed for nomination pursuant to Section 6.2, the Secretary of the Corporation shall send a written notice to the Executive Representatives of the FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws announcing the names of the candidates and describing contested nomination procedures.
        Renumbered from Sec. 6.17 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Administrative Support

        Sec. 6.6  The Secretary of the Corporation shall provide administrative support to all candidates by sending to FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws up to two mailings of materials prepared by the candidates. The Corporation shall pay the postage for the mailings. If a candidate wants such mailings sent, the candidate shall prepare such material on the candidate’s personal stationery. The material shall state that it represents the opinion of the candidate. The candidate shall provide a copy of such material for each member eligible to vote in the size classification of the open seat on the NAC. A candidate proposed for nomination by the Nominating Committee may identify himself or herself as such in his or her materials. Any candidate may send additional mailings to FINRA members at the candidate’s own expense. Except as provided in these By-Laws, FINRA Regulation, the Board, the Nominating Committee, any other committee, the National Adjudicatory Council, and FINRA Regulation staff shall not provide any other administrative support to a candidate for the nomination under this Article or any candidate in a contested election conducted under Article VII of the FINRA By-Laws.
        Renumbered from Sec. 6.18 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Ballots

        Sec. 6.7  With the assistance of the Secretary of the Corporation and an Independent Agent, the Nominating Committee shall prepare a ballot with the name or names of its candidate and any additional candidates proposed for nomination pursuant to Section 6.2. The ballot shall list the candidates in alphabetical order and shall identify the candidate or candidates proposed for nomination by the Nominating Committee. The Secretary of the Corporation shall send a ballot to the Executive Representative of each FINRA member eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws. Instructions on the ballot shall direct the Executive Representative to return the ballot to the Independent Agent and state that the ballot must be postmarked or otherwise delivered on or before the return date specified on the ballot. The return date specified on the ballot shall be no fewer than 30 and no more than 45 days after the date of mailing or other delivery of the ballot.
        Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
        Renumbered from Sec. 6.19 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 16-27

      • Vote Qualification List

        Sec. 6.8  Eligibility to vote on a nomination shall be based on FINRA’s membership records as of a date designated by the Secretary of the Corporation that is not more than 30 days before the date of mailing of the ballot. The Secretary of the Corporation shall prepare a list of FINRA members eligible to vote in the election and the names of their Executive Representatives, which shall be used for vote qualification purposes, and shall provide the list to the candidates.
        Renumbered from Sec. 6.20 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Ballots Returned As Undelivered

        Sec. 6.9  The Independent Agent shall investigate any ballot returned undelivered and shall determine whether it was sent to the FINRA member's address of record. If incorrectly addressed, the Independent Agent shall send a new ballot to the FINRA member's address of record.
        Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
        Renumbered from Sec. 6.21 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 16-27

      • General Procedures for Qualification and Accounting of Ballots

        Sec. 6.10  After the close of the voting period, the Independent Agent shall tabulate the ballots and notify the Secretary of the Corporation of the voting results for each National Adjudicatory position subject to election within 14 calendar days after the return date specified on the ballot pursuant to Section 6.7.
        Amended by SR-FINRA-2016-014 eff. Aug. 11, 2016.
        Renumbered from Sec. 6.22 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 16-27

      • Ballots Set Aside

        Sec. 6.11  The Independent Agent shall set aside a ballot if: (a) the ballot is received from a FINRA member eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws and the ballot is signed by a person who is not the Executive Representative listed on the vote qualification list prepared under Section 6.8, and the Secretary of the Corporation has not received proper notice of a change in Executive Representative pursuant to the FINRA By-Laws; or (b) two or more properly executed ballots are received from a FINRA member eligible to vote based on the firm size classifications (Small Firm, Mid-Size Firm, or Large Firm) defined in these By-Laws. If the Independent Agent determines that the ballots set aside are material to the outcome of the nomination, the Secretary of the Corporation and the Independent Agent shall make reasonable efforts to resolve each ballot set aside. With respect to a ballot not signed by an Executive Representative of record, the Secretary of the Corporation shall contact the FINRA member to request that the FINRA member send proper written notice of any change in Executive Representative by facsimile so that the ballot may be counted. With respect to multiple ballots from any FINRA member, the Independent Agent shall contact the Executive Representative of the FINRA member to obtain the FINRA member's vote. The Secretary of the Corporation shall keep a list of FINRA members that reported their ballot was lost or not received and that were provided with a duplicate ballot. The Secretary of the Corporation shall provide the list to the Independent Agent and, upon request, to the candidates.
        Renumbered from Sec. 6.23 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Invalid Ballots

        Sec. 6.12  The Independent Agent shall declare a ballot invalid if one or more of the following conditions exists:
        (a) the ballot is not signed by the Executive Representative (unless Section 6.11 applies);
        (b) a vote is not indicated on the ballot; or
        (c) a vote for more than one candidate is indicated on the ballot.
        Renumbered from Sec. 6.24 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Certification of Nomination

        Sec. 6.13  Under the direction of the Secretary of the Corporation or the Secretary’s designee, the Independent Agent shall count the votes received for each candidate. The candidate receiving the largest number of votes cast by FINRA members eligible to vote based on the firm size classifications (Small Firm, Mid- Size Firm, or Large Firm) defined in these By-Laws shall be declared the nominee and the Nominating Committee shall nominate such candidate to the FINRA Board. In the event of a tie, there shall be a run-off vote for the nomination. The Nominating Committee shall send a written certification of the nomination results to the FINRA Board. The certification shall state the number of votes received by each candidate and the number of ballots set aside.
        Renumbered from Sec. 6.25 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Extension of Time and Additional Procedures

        Sec. 6.14  The Secretary of the Corporation may extend a time period under this Article for good cause shown. In extraordinary circumstances, the Secretary of the Corporation, with the approval of the Executive Committee or the FINRA Board, may adopt additional procedures for nominations under this Article.
        Renumbered from Sec. 6.27 and amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE VII OFFICERS, AGENTS, AND EMPLOYEES

      • Officers

        Sec. 7.1  The Board shall elect the officers of FINRA Regulation, which shall include a President, a Secretary, and such other executive or administrative officers as it shall deem necessary or advisable, including, but not limited to: Executive Vice President, Senior Vice President, Vice President, General Counsel, and Treasurer of FINRA Regulation. All such officers shall have such titles, powers, and duties, and shall be entitled to such compensation, as shall be determined from time to time by the Board. The terms of office of such officers shall be at the pleasure of the Board, which by affirmative vote of a majority of the Board, may remove any such officer at any time. One person may hold the offices and perform the duties of any two or more of said offices, except the offices and duties of President and Vice President or of President and Secretary. None of the officers, except the President, need be Directors of FINRA Regulation.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Absence of the President

        Sec. 7.2  In the case of the absence or inability to act of the President of FINRA Regulation, or in the case of a vacancy in such office, the Board may appoint its Chair or such other person as it may designate to act as such officer pro tem, who shall assume all the functions and discharge all the duties of the President.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Agents and Employees

        Sec. 7.3  In addition to the officers, FINRA Regulation may employ such agents and employees as the Board may deem necessary or advisable, each of whom shall hold office for such period and exercise such authority and perform such duties as the Board, the President, or any officer designated by the Board may from time to time determine. Agents and employees of FINRA Regulation shall be under the supervision and control of the officers of the FINRA Regulation, unless the Board, by resolution, provides that an agent or employee shall be under the supervision and control of the Board.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Delegation of Duties of Officers

        Sec. 7.4  The Board may delegate the duties and powers of any officer of FINRA Regulation to any other officer or to any Director for a specified period of time and for any reason that the Board may deem sufficient.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Resignation and Removal of Officers

        Sec. 7.5  (a) Any officer may resign at any time upon written notice of resignation to the Board, the President, or the Secretary. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein. The acceptance of a resignation shall not be necessary to make the resignation effective.
        (b) Any officer of FINRA Regulation may be removed, with or without cause, by resolution adopted by a majority of the Directors then in office at any regular or special meeting of the Board or by a written consent signed by all of the Directors then in office. Such removal shall be without prejudice to the contractual rights of the affected officer, if any, with FINRA Regulation.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Bond

        Sec. 7.6  FINRA Regulation may secure the fidelity of any or all of its officers, agents, or employees by bond or otherwise.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE VIII REGIONAL COMMITTEES

      • Establishment of Districts and Regions

        Sec. 8.1  The Board shall establish boundaries for districts within the United States to assist FINRA Regulation in administering its affairs in a manner that is consistent with applicable law, the Restated Certificate of Incorporation, these By-Laws, the Delegation Plan, and the Rules of the Corporation. The Board may organize the districts into regions to promote efficiency and sound administration. It may make changes from time to time in the number or boundaries of the districts or regions as it deems necessary or appropriate. The Board shall prescribe such policies and procedures as are necessary or appropriate to address the implementation of a new district or region configuration in the event of a change in the number or boundaries of the districts or regions. Schedule A to these By-Laws identifies the districts, their territorial boundaries and respective regions as currently established by the Board.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Composition of Regional Committees

        Sec. 8.2  (a) A district within its respective region, as established under Section 8.1, shall elect no fewer than six Regional Committee members to serve on the Regional Committee for its respective region, unless otherwise provided by resolution of the Board. A Regional Committee shall consist of no fewer than five and no more than 20 members, unless otherwise provided by resolution of the Board. Subject to the limitation set forth in the immediately preceding sentence, the authorized number of members of a Regional Committee shall be determined from time to time by the Board; provided, however, that no decrease in the authorized number of members of a Regional Committee shall shorten the term of office of any member thereof. Each Regional Committee member of a particular district shall: (1) be associated with a FINRA member eligible to vote in the district-level elections and registered in the capacity of a branch manager or principal or denoted as a corporate officer of the FINRA member; and (2) work for a firm headquartered within the district the Regional Committee member is representing. For purposes of this provision, a FINRA member is headquartered where it designates its main address on the member's Form BD. Members of the Regional Committees shall serve as panelists in disciplinary proceedings in accordance with the Rules of the Corporation. The Regional Committees shall consider and recommend policies and rule changes to the Board. The Regional Committees shall endeavor to educate FINRA members and other brokers and dealers in their respective districts as to the objects, purposes, and work of FINRA and FINRA Regulation in order to foster FINRA members' interest and cooperation.
        (b) A member of a Regional Committee may resign at any time upon giving Notice to the District Director. Any such resignation shall take effect upon receipt of such Notice or at any later time specified therein, provided that notice of resignation at a later date may be made immediately effective at the discretion of the Chief Executive Officer or his or her designee. The acceptance of such resignation shall not be necessary to make such resignation effective.
        (c) In the event of the refusal, failure, neglect, or inability of a member of a Regional Committee to discharge his or her duties, or for any cause affecting the best interests of FINRA Regulation, the sufficiency of which shall be decided by the Regional Committee, the Regional Committee may remove the member by the affirmative vote of two-thirds of the members of the Regional Committee then in office and declare the Regional Committee member's position vacant. The Regional Committee shall notify the Regional Committee member of his or her removal within seven days after the vote. A Regional Committee member who is removed may submit a written appeal of the removal to the Board within 30 days after the date he or she is notified of the removal. The Board may affirm, reverse, or modify the determination of the Regional Committee. A vote of a majority of the Directors then in office shall be required to reverse or modify the action of the Regional Committee.
        (d) In the event of a vacancy in a Regional Committee resulting from death, resignation, removal, or other cause, the Chief Executive Officer or his or her designee shall determine whether such vacancy shall be filled prior to the next regularly scheduled election of Regional Committee members. In the event the Chief Executive Officer or his or her designee determines that a vacancy on a Regional Committee should be filled, the vacancy shall be filled pursuant to Section 8.4.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2005-086 eff. July 5, 2005.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Term of Office of Regional Committee Members

        Sec. 8.3  Each regularly elected member of a Regional Committee shall hold office for a "full term" which is the later of three years or until a successor is elected and qualified. Notwithstanding the term of office for a regularly elected Regional Committee member, such member's term shall terminate sooner upon the member's death, resignation, or removal. There is no limit on the number of terms that may be served by a member of a Regional Committee, except that a Regional Committee member may serve no more than two full terms consecutively.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Filling of Vacancies on Regional Committees

        Sec. 8.4  In the event of a vacancy on a Regional Committee prior to the expiration of the Regional Committee member's term of office, and where the Chief Executive Officer or his or her designee determines, pursuant to Section 8.2(d), that such vacancy should be filled, or in the event of a newly created membership on a Regional Committee by virtue of an increase in the authorized number of members thereof, the Regional Committee shall appoint by majority vote an individual who meets the qualification requirements of Section 8.2(a) to fill a vacancy. The appointment by the Regional Committee shall be effective until the next regularly scheduled election, and until such Regional Committee member's successor is elected and qualified. Following the next regularly scheduled election, in the event of a vacancy, the newly elected Regional Committee member shall serve only the duration of the departed Regional Committee member's term, and in the event of a newly created membership, the newly elected Regional Committee member shall serve only the duration of the term for such class of membership.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Meetings of Regional Committees

        Sec. 8.5  Meetings of a Regional Committee shall be held in its region, as identified in Schedule A to these By-Laws, at such times and places, upon such notice, and in accordance with such procedures as the Chief Executive Officer or his or her designee in his or her discretion may determine. A quorum of a Regional Committee shall consist of a majority of its members, and any action taken by a majority present at any meeting at which a quorum is present, except as otherwise provided in these By-Laws, shall constitute the action of the Committee. Any or all members of a Regional Committee may participate in any such meeting by means of conference telephone or other communications equipment by means of which all participants can communicate with each other, and such participation shall constitute presence in person at the meeting. Action by a Regional Committee may be taken by consent in writing or by electronic transmission in lieu of a meeting, in which case any action taken by a majority of the Committee shall constitute the action of the Committee.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Expenses of Regional Committees

        Sec. 8.6  Funds to meet the regular expenses of each Regional Committee shall be provided by the Board, and all such expenses shall be subject to the approval of the Board.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Solicitation of Candidates and Secretary's Notice to FINRA Members

        Sec. 8.7  The Secretary of FINRA Regulation shall give a Notice of the upcoming election to FINRA members and the Executive Representatives of FINRA members describing the election procedures and stating that FINRA members may submit names of Regional Committee member candidates for consideration to the Secretary of FINRA Regulation.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Self-Nomination of Candidates and Vacancy Appointments

        Sec. 8.8  (a) An individual who meets the qualification requirements of Section 8.2(a) wishing to be considered for election to the Regional Committee shall deliver a written Notice to the Secretary of FINRA Regulation within 30 calendar days after the Secretary of FINRA Regulation gives the Notice of the upcoming elections pursuant to Section 8.7. The Secretary of FINRA Regulation shall make a written record of the time and date of the receipt of each Notice from a qualified individual, and designate that individual as a candidate.
        (b) In the event that no candidate is designated for a particular Regional Committee vacancy, the Chief Executive Officer or his or her designee shall appoint an individual who meets the qualification requirements of Section 8.2(a) to fill that vacancy for a full term.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Adopted by SR-FINRA-2011-011 eff. April 28, 2011.

      • FINRA Members Eligible to Vote

        Sec. 8.9  A FINRA member that is headquartered in the district shall be eligible to cast one vote through the FINRA member's Executive Representative for each position to be filled in the election representing that district on the Regional Committee. For purposes of this provision, a FINRA member is headquartered where it designates its main address on the member's Form BD.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Administrative Support

        Sec. 8.10  The Secretary of FINRA Regulation shall provide administrative support to all candidates, according to procedures published by the Secretary. Any candidate may also send communications to FINRA members eligible to vote in the district at the candidate's own expense, provided that such communications clearly state that they represent the opinions of the candidate. Except as provided in this Article, FINRA Regulation, the Board, any committee, and FINRA Regulation staff shall not provide any other administrative support to a candidate in the election.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Ballots

        Sec. 8.11  The Secretary of FINRA Regulation shall send a ballot to the Executive Representative of each FINRA member eligible to vote in the district. The ballot shall list the candidates for each position subject to election in alphabetical order. Instructions on the ballot shall direct the Executive Representative to return the ballot to the Independent Agent and state that the ballot must be postmarked or otherwise delivered on or before the return date specified on the ballot. The return date specified on the ballot shall be no fewer than 20 and no more than 30 days after the date of mailing or other delivery of the ballot.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Vote Qualification List

        Sec. 8.12  Eligibility to vote in a district-level election shall be based on FINRA's membership records as of a date selected by the Secretary of FINRA Regulation that is not more than 30 days before the date of mailing of the ballot. The Secretary of FINRA Regulation shall prepare a list of FINRA members eligible to vote in the district, their mailing addresses, and their Executive Representatives, which shall be used for vote qualification purposes, and shall provide the applicable list to candidates upon request.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Ballots Returned As Undelivered

        Sec. 8.13  The Independent Agent shall investigate any ballot returned undelivered and shall determine whether it was sent to the FINRA member's address of record. If incorrectly addressed, the Independent Agent shall send a new ballot to the address of record.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • General Procedures for Qualification and Accounting of Ballots

        Sec. 8.14  After the close of the voting period, the Independent Agent shall tabulate the ballots and notify the Secretary of FINRA Regulation of the voting results for each Regional Committee position subject to election within 14 calendar days after the return date specified on the ballot pursuant to Section 8.11.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Ballots Set Aside

        Sec. 8.15  The Independent Agent shall set aside a ballot if: (a) the ballot is received from a FINRA member eligible to vote in the district and the ballot is signed by a person who is not the Executive Representative listed on the vote qualification list prepared under Section 8.12, and the Secretary of FINRA has not received proper notice of a change in Executive Representative pursuant to the FINRA By-Laws; or (b) if two or more properly executed ballots are received from a FINRA member eligible to vote in the district. If the Independent Agent determines that the ballots set aside are material to the outcome of the election, the Secretary of FINRA Regulation and the Independent Agent shall make reasonable efforts to resolve each ballot set aside. With respect to a ballot not signed by an Executive Representative of record, the Secretary of FINRA Regulation shall contact the FINRA member to request that the FINRA member send written notice of any change in Executive Representative to a FINRA designated system or by facsimile so that the ballot may be counted. With respect to multiple ballots from a FINRA member, the Independent Agent shall contact the Executive Representative of the FINRA member to obtain the FINRA member's vote. The Secretary of FINRA Regulation shall keep a list of FINRA members that reported their ballot was lost or not received and that were provided with a duplicate ballot. The Secretary of FINRA Regulation shall provide the list to the Independent Agent and, upon request, to the candidates.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Invalid Ballots

        Sec. 8.16  The Independent Agent shall declare a ballot invalid if one or more of the following conditions exist:
        (a) the ballot is not signed by the Executive Representative (unless Section 8.15 applies);
        (b) a vote is not indicated on the ballot; or
        (c) the ballot indicates votes for more than one candidate per position subject to election.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Election Results

        Sec. 8.17  The Independent Agent shall count the votes received for each candidate in a district. The district-level candidates for the office of member of the Regional Committee receiving the largest number of votes cast by FINRA members eligible to vote in the district for the office shall be declared elected such that the number of candidates declared elected corresponds to the number of positions on the Regional Committee subject to the district-level election. In the event of a tie, there shall be a run-off election. The Secretary of FINRA Regulation shall notify the Board of the election results. The notification shall state the number of votes received by each candidate and the number of ballots set aside.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Extensions of Time and Additional Procedures

        Sec. 8.18  The Secretary of FINRA Regulation may extend a time period under this Article for good cause shown. In extraordinary circumstances, the Secretary of FINRA Regulation, with the approval of the Executive Committee or the Board, may adopt additional procedures for elections under this Article.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Definitions

        Sec. 8.19  (a) When used in Article VIII of these By-Laws, the term "Notice" means a notice in writing or by electronic transmission.
        (b) For purposes of this Article VIII, any Notice by FINRA Regulation, the Secretary of FINRA Regulation, or the District Director given by electronic transmission shall be deemed given: (1) if by facsimile telecommunication, when directed to a number at which the person entitled to notice has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the person entitled to notice has consented to receive notice; (3) if by a posting on an electronic network when the person entitled to notice has consented to receive notice in this manner, together with separate notice to the person entitled to notice of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission when the person entitled to notice has consented to receive notice in this manner, when directed to the person entitled to notice. For purposes of this Article VIII, if mailed, any such Notice by FINRA Regulation, the Secretary of FINRA Regulation, or the District Director shall be deemed given when deposited in the United States mail, postage prepaid, directed to the person entitled to notice at such person's address as it appears on the records of FINRA Regulation.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2011-011 eff. April 28, 2011.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-2003-55 eff. Feb. 1, 2004.

        Selected Notice: 16-04

    • ARTICLE IX COMPENSATION

      • Compensation of Board, Council, and Committee Members

        Sec. 9.1  The Board may provide for reasonable compensation of the Chair of the Board, the Directors, National Adjudicatory Council members, and the members of any committee of the Board or any Regional Committee. The Board may also provide for reimbursement of reasonable expenses incurred by such persons in connection with the business of FINRA Regulation.
        Amended by SR-FINRA-2018-021 eff. May 18, 2018.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE X INDEMNIFICATION

      • Indemnification of Directors, Officers, Employees, Agents, National Adjudicatory Council and Committee Members

        Sec. 10.1  (a) FINRA Regulation shall indemnify, and hold harmless, to the fullest extent permitted by Delaware law as it presently exists or may thereafter be amended, any person (and the heirs, executors, and administrators of such person) who, by reason of the fact that he or she is or was a Director, officer, or employee of FINRA Regulation or a National Adjudicatory Council or committee member, or is or was a Director, officer, or employee of FINRA Regulation who is or was serving at the request of FINRA Regulation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity, including service with respect to employee benefit plans, is or was a party, or is threatened to be made a party to:
        (i) any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of FINRA Regulation) against expenses (including attorneys' fees and disbursements), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with any such action, suit, or proceeding; or
        (ii) any threatened, pending, or completed action or suit by or in the right of FINRA Regulation to procure a judgment in its favor against expenses (including attorneys' fees and disbursements) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit.
        (b) FINRA Regulation shall advance expenses (including attorneys' fees and disbursements) to persons described in subsection (a); provided, however, that the payment of expenses incurred by such person in advance of the final disposition of the matter shall be conditioned upon receipt of a written undertaking by that person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Section or otherwise.
        (c) FINRA Regulation may, in its discretion, indemnify and hold harmless, to the fullest extent permitted by Delaware law as it presently exists or may thereafter be amended, any person (and the heirs, executors, and administrators of such persons) who, by reason of the fact that he or she is or was an agent of FINRA Regulation or is or was an agent of FINRA Regulation who is or was serving at the request of FINRA Regulation as a director, officer, employee, or agent of another corporation, partnership, trust, enterprise, or non-profit entity, including service with respect to employee benefit plans, was or is a party, or is threatened to be made a party to any action or proceeding described in subsection (a).
        (d) FINRA Regulation may, in its discretion, pay the expenses (including attorneys' fees and disbursements) reasonably and actually incurred by an agent in defending any action, suit, or proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by such person in advance of the final disposition of the matter shall be conditioned upon receipt of a written undertaking by that person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Section or otherwise.
        (e) Notwithstanding the foregoing or any other provision of these By-Laws, no advance shall be made by FINRA Regulation to an agent or non-officer employee if a determination is reasonably and promptly made by the Board by a majority vote of those Directors who have not been named parties to the action, even though less than a quorum, or, if there are no such Directors or if such Directors so direct, by independent legal counsel, that, based upon the facts known to the Board or such counsel at the time such determination is made: (1) the person seeking advancement of expenses (i) acted in bad faith, or (ii) did not act in a manner that he or she reasonably believed to be in or not opposed to the best interests of FINRA Regulation; (2) with respect to any criminal proceeding, such person believed or had reasonable cause to believe that his or her conduct was unlawful; or (3) such person deliberately breached his or her duty to FINRA Regulation.
        (f) The indemnification provided by this Section in a specific case shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, National Adjudicatory Council or committee member, employee, or agent and shall inure to the benefit of such person's heirs, executors, and administrators.
        (g) Notwithstanding the foregoing, but subject to subsection (j), FINRA Regulation shall be required to indemnify any person identified in subsection (a) in connection with a proceeding (or part thereof) initiated by such person only if the initiation of such proceeding (or part thereof) by such person was authorized by the Board.
        (h) FINRA Regulation's obligation, if any, to indemnify or advance expenses to any person who is or was serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement from such other corporation, partnership, joint venture, trust, enterprise, or non-profit entity.
        (i) Any repeal or modification of the foregoing provisions of this Section shall not adversely affect any right or protection hereunder of any person respecting any act or omission occurring prior to the time of such repeal or modification.
        (j) If a claim for indemnification or advancement of expenses under this Article is not paid in full within 60 days after a written claim therefor by an indemnified person has been received by FINRA Regulation, the indemnified person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, FINRA Regulation shall have the burden of proving that the indemnified person is not entitled to the requested indemnification or advancement of expenses under Delaware law.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Indemnification Insurance

        Sec. 10.2  FINRA Regulation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, National Adjudicatory Council or committee member, employee, or agent of FINRA Regulation, or is or was serving at the request of FINRA Regulation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or non-profit entity against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not FINRA Regulation would have the power to indemnify such person against such liability hereunder.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE XI CAPITAL STOCK

      • Sole Stockholder

        Sec. 11.1  FINRA shall be the sole stockholder of the capital stock of FINRA Regulation.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Certificates

        Sec. 11.2  The stockholder shall be entitled to a certificate or certificates in such form as shall be approved by the Board, certifying the number of shares of capital stock in FINRA Regulation owned by the stockholder.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Signatures

        Sec. 11.3  (a) Certificates representing shares of capital stock of FINRA Regulation shall be signed in the name of FINRA Regulation by two officers with one being the President or a Vice President, and the other being the Secretary or the Treasurer. Such certificates may be sealed with the corporate seal of FINRA Regulation or a facsimile thereof.
        (b) Any signature on the stock certificate may be a facsimile. In the event that any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a stock certificate shall cease to be such officer, transfer agent, or registrar before such certificate is issued, such certificate may be issued by FINRA Regulation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue.
        Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notices: 09-39, 16-04.

      • Stock Ledger

        Sec. 11.4  (a) A record of all certificates representing capital stock issued by FINRA Regulation shall be kept by the Secretary or any other officer, employee, or agent designated by the Board. Such record shall show the name and address of the person, firm, or corporation in which certificates representing capital stock are registered, the number of shares represented by each such certificate, the date of each such certificate, and in the case of certificates that have been canceled, the date of cancellation thereof.
        (b) FINRA Regulation shall be entitled to treat the holder of record of shares of capital stock as shown on the stock ledger as the owner thereof and as the person entitled to vote such shares and to receive notice of meetings, and for all other purposes. Except as otherwise required by applicable law, FINRA Regulation shall not be bound to recognize any equitable or other claim to or interest in any share of capital stock on the part of any other person, whether or not FINRA Regulation shall have express or other notice thereof.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Transfers of Stock

        Sec. 11.5  (a) The Board may make such rules and regulations as it may deem expedient, not inconsistent with law, the Restated Certificate of Incorporation, or these By-Laws, concerning the issuance, transfer, and registration of shares of capital stock of FINRA Regulation. The Board may appoint, or authorize any principal officer to appoint, one or more transfer agents or one or more transfer clerks and one or more registrars and may require all certificates representing capital stock to bear the signature or signatures of any of them.
        (b) Transfers of capital stock shall be made on the books of FINRA Regulation only upon delivery to FINRA Regulation or its transfer agent of: (i) a written direction of the registered holder named in the certificate or such holder's attorney lawfully constituted in writing; (ii) the certificate representing the shares of capital stock being transferred; and (iii) a written assignment of the shares of capital stock evidenced thereby.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Cancellation

        Sec. 11.6  Each certificate representing capital stock surrendered to FINRA Regulation for exchange or transfer shall be canceled and no new certificate or certificates shall be issued in exchange for any existing certificate other than pursuant to Section 11.7 until such existing certificate shall have been canceled.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Lost, Stolen, Destroyed, and Mutilated Certificates

        Sec. 11.7  In the event that any certificate representing shares of capital stock of FINRA Regulation shall be mutilated, FINRA Regulation shall issue a new certificate in place of such mutilated certificate. In the event that any such certificate shall be lost, stolen, or destroyed FINRA Regulation may, in the discretion of the Board or a committee appointed thereby with power so to act, issue a new certificate representing shares of capital stock in the place of any such lost, stolen, or destroyed certificate. The applicant for any substituted certificate or certificates shall surrender any mutilated certificate or, in the case of any lost, stolen, or destroyed certificate, furnish satisfactory proof of such loss, theft, or destruction of such certificate and of the ownership thereof. The Board or such committee may, in its discretion, require the owner of a lost or destroyed certificate, or such owner's representatives, to furnish to FINRA Regulation a bond with an acceptable surety or sureties and in such sum as shall be sufficient to indemnify FINRA Regulation against any claim that may be made against it on account of the lost, stolen, or destroyed certificate or the issuance of such new certificate. A new certificate may be issued without requiring a bond when, in the judgment of the Board, it is proper to do so.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Fixing of Record Date

        Sec. 11.8  The Board may fix a record date in accordance with Delaware law.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE XII MISCELLANEOUS PROVISIONS

      • Corporate Seal

        Sec. 12.1  The seal of FINRA Regulation shall be circular in form and shall bear, in addition to any other emblem or device approved by the Board, the name of FINRA Regulation, the year of its incorporation, and the words "Corporate Seal" and "Delaware." The seal may be used by causing it to be affixed or impressed, or a facsimile thereof may be reproduced or otherwise used in such manner as the Board may determine.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Fiscal Year

        Sec. 12.2  The fiscal year of FINRA Regulation shall begin on the first day of January in each year, or such other month as the Board may determine by resolution.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Waiver of Notice

        Sec. 12.3  (a) Whenever notice is required to be given by law, the Restated Certificate of Incorporation, or these By-Laws, a written waiver thereof, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholder, Directors, or members of a committee of Directors need be specified in any written waiver of notice.
        (b) Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
        Amended by SR-FINRA-2009-020 eff. Aug. 20, 2009.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

        Selected Notice: 09-39.

      • Execution of Instruments, Contracts, Etc.

        Sec. 12.4  (a) All checks, drafts, bills of exchange, notes, or other obligations or orders for the payment of money shall be signed in the name of FINRA Regulation by such officer or officers or person or persons as the Board, or a duly authorized committee thereof, may from time to time designate. Except as otherwise provided by law, the Board, any committee given specific authority in the premises by the Board, or any committee given authority to exercise generally the powers of the Board during intervals between meetings of the Board, may authorize any officer, employee, or agent, in the name of and on behalf of FINRA Regulation, to enter into or execute and deliver deeds, bonds, mortgages, contracts, and other obligations or instruments, and such authority may be general or confined to specific instances.
        (b) All applications, written instruments, and papers required by any department of the United States Government or by any state, county, municipal, or other governmental authority, may be executed in the name of FINRA Regulation by any principal officer or subordinate officer of FINRA Regulation, or, to the extent designated for such purpose from time to time by the Board, by an employee or agent of FINRA Regulation. Such designation may contain the power to substitute, in the discretion of the person named, one or more other persons.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Form of Records

        Sec. 12.5  Any records maintained by FINRA Regulation in the regular course of business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, magnetic tape, computer disk, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • ARTICLE XIII AMENDMENTS; EMERGENCY BY-LAWS

      • By Stockholder

        Sec. 13.1  These By-Laws may be altered, amended, or repealed, or new By-Laws may be adopted, at any meeting of the stockholder, provided that, in the case of a special meeting, notice that an amendment is to be considered and acted upon shall be inserted in the notice or waiver of notice of said meeting.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • By Directors

        Sec. 13.2  To the extent permitted by the Restated Certificate of Incorporation, these By-Laws may be altered, amended, or repealed, or new By-Laws may be adopted, at any regular or special meeting of the Board.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

      • Emergency By-Laws

        Sec. 13.3  The Board may adopt emergency By-Laws subject to repeal or change by action of the stockholder that shall, notwithstanding any different provision of law, the Restated Certificate of Incorporation, or these By-Laws, be operative during any emergency resulting from any nuclear or atomic disaster, an attack on the United States or on a locality in which FINRA Regulation conducts its business or customarily holds meetings of the Board or stockholder, any catastrophe, or other emergency condition, as a result of which a quorum of the Board or a committee thereof cannot readily be convened for action. Such emergency By-Laws may make any provision that may be practicable and necessary under the circumstances of the emergency.
        Amended by SR-FINRA-2008-046 eff. Nov. 6, 2008.
        Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • Schedule A to the FINRA Regulation By-Laws

      The number and territorial boundaries of the several districts and their respective regions, established as provided in Article VIII, Section 8.1, are as follows:
      Districts
      District No. 1 State of Hawaii; in the State of California, the Counties of Monterey, San Benito, Fresno and Inyo, and the remainder of the State North or West of such Counties; and in the State of Nevada, the Counties of Esmeralda and Nye, and the remainder of the State North or West of such Counties.
      District No. 2 In the State of California, that part of the State South or East of the Counties of Monterey, San Benito, Fresno and Inyo; and, in the State of Nevada, that part of the State South or East of the Counties of Esmeralda and Nye, and all Pacific possessions and territories of the United States.
      District No. 3 States of Alaska, Arizona, Colorado, Idaho, Montana, New Mexico, Oregon, Utah, Washington and Wyoming.
      District No. 4 States of Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
      District No. 5 States of Alabama, Arkansas, Louisiana, Mississippi, Oklahoma and Tennessee.
      District No. 6 State of Texas.
      District No. 7 States of Florida, Georgia, North Carolina, and South Carolina, Puerto Rico and the Virgin Islands.
      District No. 8 States of Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin.
      District No. 9 The District of Columbia, and the States of Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia, and New York (except for the five Boroughs of New York City and the Counties of Nassau and Suffolk).
      District No. 10 In the State of New York, the five Boroughs of New York City and the Counties of Nassau and Suffolk.
      District No. 11 States of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
      Regions
      Midwest Region: Districts 4 and 8
      New York Region: District 10
      North Region: Districts 9 and 11
      South Region: Districts 5, 6 and 7
      West Region: Districts 1, 2 and 3
      Amended by SR-FINRA-2011-011 eff. April 28, 2011.
      Adopted by SR-FINRA-2009-020 eff. Aug. 20, 2009.

      Selected Notice: 09-39.