FINRA Rule 1220 Explained: Registration Categories | InnReg (2025)

What Is FINRA Rule 1220?

FINRA Rule 1220 outlines the various registration categories for individuals associated with member firms in the investment banking or securities business. This section provides a detailed breakdown of each category, the required qualifications, and each role’s specific responsibilities.

Principal Registration Categories

A "principal" is anyone associated with a member firm who is actively managing the firm's investment banking or securities business. This includes:

  • Chief Executive Officers

  • Chief Financial Officers

  • Officers, partners, managers, and directors

  • Individuals with management-level responsibilities or decision-making authority

Below are the various categories of principal registration:

General Securities Principal (GSP)

Requirement: Every principal must register as a GSP unless their activities fall into other specific categories (e.g., Government Securities Principal, Investment Company & Variable Contracts Product Principal, Direct Participation Program Principal, or Private Securities Offerings Principal).

Qualifications: Existing General Securities Representatives can register as GSPs by passing the required exams unless exempted.

Specific Principal Categories

1. Compliance Officer

Requirement: Every person designated as a Chief Compliance Officer on Schedule A of Form BD must register with FINRA as a Compliance Officer.

Qualifications: Existing General Securities Representatives can register as Compliance Officers provided that prior to or concurrent with such registration, they pass the GSP qualification examination.

2. Financial and Operations Principal & Introducing Broker-Dealer Financial and Operations Principal (FINOP)

Requirement: Each member firm must designate either a FINOP or an Introducing Broker-Dealer Financial and Operations Principal, depending on the specific subsection of SEC rule 15c3-1 under which the firm operates.

Qualifications: Must pass either the Financial and Operations Principal qualification examination or the Introducing Broker-Dealer Financial and Operations Principal qualification examination.

3. Investment Banking Principal

Requirement: Principals supervising investment banking activities must register in this category.

Qualifications: Must be registered as an Investment Banking Representative and pass the GSP qualification examination.

4. Research Principal

Requirement: Principals approving research reports on equity securities or who supervise the overall conduct of a Research Analyst must register as Research Principals.

Qualifications: Must become registered as a Research Analyst and pass the GSP qualification examination or register as a Supervisory Analyst and pass the GSP qualification examination.

5. Securities Trader Principal

Requirement: Principals supervising securities trading activities must register in this category.

Qualifications: Must register as a Securities Trader and pass the GSP qualification examination.

6. Registered Options Principal

Requirement: Firms engaged in options transactions with the public must have at least one Registered Options Principal.

Qualifications: Must pass the Registered Options Principal qualification examination.

Exceptions: If the principal's options activities are limited solely to activities that may be supervised by a General Securities Sales Supervisor, they can register as a General Securities Sales Supervisor instead of registering as a Registered Options Principal.

7. Other Principal Categories

These include Government Securities Principal, General Securities Sales Supervisor, Investment Company and Variable Contracts Products Principal, Direct Participation Programs Principal, and Private Securities Offerings Principal.

Representative Registration Categories

A "representative" is any associated person engaged in the investment banking or securities business of a member firm, such as:

  • Supervision

  • Solicitation

  • Conduct of business in securities

  • Training of associated persons for the functions listed above

General Securities Representative (GSR)

Requirement: All representatives must register as GSRs unless their activities fall into specific categories.

Qualifications: Must pass the Securities Industry Essentials (SIE) exam and the General Securities Representative qualification examination.

Specific Representative Categories

1. Operations Professional

Requirement: Individuals with direct responsibility for covered functions, any person designated by senior management as a supervisor, manager, or other person responsible for approving or authorizing the work of other persons in direct furtherance of the covered functions, and individuals with authority to commit a Member’s capital (or commit a Member to any material contract or agreement) in regards to the covered functions must register as Operations Professionals.

Qualifications: Must pass the Securities Industry Essentials (SIE) exam and the Operations Professional qualification examination.

2. Securities Trader

Requirement: Individuals engaged in proprietary trading, the execution of transactions on an agency basis, or the direct supervision of these activities (concerning transactions in equity, preferred, or convertible debt securities affected otherwise than on a securities exchange) must register as Securities Traders. Additionally, each person is primarily responsible for designing, developing, or significantly modifying an algorithmic trading strategy relating to equity, preferred, or convertible debt securities, and the day-to-day supervisor of these activities must register as Securities Traders.

Qualifications: Must pass the Securities Industry Essentials (SIE) exam and the Securities Trader qualification examination.

3. Investment Banking Representative

Requirement: Individuals advising on or facilitating debt or equity securities offerings through a private placement or public offering or advising on or facilitating M&A activities must register in this category.

Qualifications: Must pass the Securities Industry Essentials (SIE) exam and the Investment Banking Representative qualification examination.

4. Research Analyst

Requirement: Individuals functioning as research analysts must register as Research Analysts.

Qualifications: Must pass the Securities Industry Essentials (SIE) exam and the Research Analyst qualification examinations.

5. Other Representative Categories

These include Investment Company and Variable Contracts Products Representative, Direct Participation Programs Representative, and Private Securities Offerings Representative.

Key Provisions and Requirements

Examination and Qualification Requirements

  • Individuals must pass the relevant qualification exams for their designated roles.

  • FINRA may grant waivers in exceptional cases based on experience and other qualifications.

Continuing Education and Maintaining Registration

  • All registered representatives and principals must complete continuing education requirements to maintain registration.

  • The Maintaining Qualifications Program allows individuals who are not registered with a Member Firm to maintain their qualifications for up to five years by completing annual continuing education.

Conduct and Confidentiality of Examinations

  • Strict rules govern the conduct and confidentiality of qualification exams.

  • Unauthorized use of study materials or receiving assistance during exams is prohibited and subject to disciplinary actions.

What Is the Purpose of Rule 1220?

FINRA Rule 1220 ensures that individuals performing specific functions within a securities firm are appropriately qualified and registered.

The primary goals of this rule are to maintain the integrity of the securities industry and protect investors by ensuring that all personnel engaged in key roles possess the necessary knowledge and skills.

Here’s why Rule 1220 is important:

Ensure Competency and Qualifications:

By requiring individuals to pass relevant qualification exams, Rule 1220 guarantees that those who manage, supervise, or engage in investment banking and securities business have the expertise needed to perform their duties responsibly and effectively.

Enhance Supervision and Accountability:

The rule clearly defines various principal and representative roles, ensuring that individuals in supervisory positions are adequately qualified. This helps establish a robust framework for oversight, reducing the risk of misconduct and enhancing the overall accountability within firms.

Protect Investors:

By mandating rigorous registration and qualification standards, Rule 1220 helps safeguard investors' interests. Qualified professionals are better equipped to provide sound advice, manage risks, and handle clients' investments with a high level of competence.


By implementing these measures, FINRA Rule 1220 plays a vital role in upholding high standards of professional conduct and ensuring the securities industry operates with integrity and transparency.

FINRA Rule 1220 Explained: Registration Categories | InnReg (2025)

FAQs

What are the three categories for communication as defined by FINRA? ›

FINRA Rule 2210 (Communications with the Public) defines all communications into one of three categories—correspondence, retail communications, or institutional communications—and sets principles-based content standards that are designed to apply to ongoing developments in communications technology and practices.

What is the FINRA rule 1220 a 4? ›

FINRA Rule 1220(a)(4)(B)(ii) requires firms to designate a Principal Operations Officer with primary responsibility for the day-to-day operations of the business.

What is a permissive registrant? ›

Definition. Permissive Registration: Any FINRA registration actively maintained by an Investment Professional, registered staff, registered employee, or Principal that does not actually require the registration for the activities they perform within their role.

What is the FINRA 5% rule? ›

In 1943, the Association's Board adopted what has become known as the "5% Policy" to be applied to transactions executed for customers. It was based upon studies demonstrating that the large majority of customer transactions were effected at a mark-up of 5% or less.

What are the four categories of communication explain? ›

Four fundamental types of communication: Verbal, Non-Verbal, Written, and Visual. Verbal communication is the exchange of spoken words and is essential for everyday life. Non-verbal communication includes facial expressions, body movement, gestures, eye contact, touch, space, pitch, and tone.

What are the four categories of communication include all of the following? ›

The four types of communication are verbal, non-verbal, visual and written communication.

What is the FINRA rule 12200? ›

12200. Arbitration Under an Arbitration Agreement or the Rules of FINRA. The dispute arises in connection with the business activities of the member or the associated person, except disputes involving the insurance business activities of a member that is also an insurance company.

What is the FINRA rule 12208? ›

At any stage of an arbitration proceeding held in a United States hearing location, all parties shall have the right to be represented by an attorney at law in good standing and admitted to practice before the Supreme Court of the United States or the highest court of any state of the United States, the District of ...

What is the FINRA rule 12209? ›

During an arbitration, no party may bring any suit, legal action, or proceeding against any other party that concerns or that would resolve any of the matters raised in the arbitration.

What is the 2 year rule for FINRA? ›

If your registration remains CE inactive for two years, it will be administratively terminated (CE Two Year Termed), and you will be required to re-qualify for your registration by examination. If you are currently registered with a firm and are unsure of your CE requirements, you should contact your firm.

Who is exempt from FINRA registration? ›

Employees exempt from FINRA registration include individuals whose functions are: Solely clerical and/or ministerial in nature, Related solely to the member's need for nominal corporate officers or capital participation (limited partners), OR.

What is a registrant list? ›

The Registrant List is a tool to manage your registrant's information that was collected and created during the registration process.

What is the FINRA red flag rule? ›

The Red Flags Rule requires specified firms to create a written Identity Theft Prevention Program (ITPP) designed to identify, detect and respond to “red flags”—patterns, practices or specific activities—that could indicate identity theft.

What is the 30 day rule for FINRA? ›

FINRA Rule 4530(b) requires a firm to report to FINRA within 30 calendar days after the firm has concluded, or reasonably should have concluded, on its own that the firm or an associated person of the firm has violated any securities, insurance, commodities, financial or investment-related laws, rules, regulations or ...

What is the rule 10 for FINRA? ›

The term "registered representative" means an employee engaged in the solicitation or handling of accounts or orders for the purchase or sale of securities, or other similar instruments for the accounts of customers of his employer or in the solicitation or handling of business in connection with investment advisory or ...

What are the three 3 main types of communication? ›

Communication can be categorized into three basic types: (1) verbal communication, in which you listen to a person to understand their meaning; (2) written communication, in which you read their meaning; and (3) nonverbal communication, in which you observe a person and infer meaning.

What are the 3 types of communication system? ›

When communication occurs, it typically happens in one of three ways: verbal, nonverbal and visual. People very often take communication for granted. Communicators constantly exchange information, meaning people always seem to be either receiving or giving information.

What are the 3 main elements of a communications strategy? ›

A business communication is strategic when it takes into account the following key elements: Target audience(s) Context. Intended outcomes.

What are the 3 different types of basic communication model? ›

The three models of communication we will discuss are the transmission, interaction, and transaction models. Although these models of communication differ, they contain some common elements.

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