Outside Business Activities (OBAs) are any work financial professionals do outside their main job. FINRA 3270 requires tracking and approval of these activities. Outside business activity software helps firms manage this process. Let’s understand these concepts in detail in this blog.
What is Outside Business Activities?
OBAs include any work done outside a financial professional’s main role – from part-time jobs to serving on boards. FINRA 3270 requires all these activities to be reported and approved before starting. This helps prevent conflicts of interest. Firms use outside business activity software to track these activities, making it easier for everyone to stay compliant and maintain good records.
How to Report Outside Business Activities?
Under FINRA 3270, financial professionals must submit written notices about any outside work, including details about what they’ll do, how long it will take, and how much they’ll earn. Their firm must review these activities for any potential problems. Outside business activity software has made this process digital and efficient, replacing old paper systems. Every submission and approval must be documented.
How Firms Monitor OBAs?
Firms keep track of their employees’ outside work using clear systems and checks. Under FINRA 3270, they must regularly review what activities are happening and ensure they don’t create problems. Outside business activity software makes this easier by automatically alerting firms when something needs attention.
The software shows everything in one place – like a dashboard showing which activities are active, which need approval, and any potential issues. Compliance teams can set up alerts based on different types of work and risk levels, making it simpler to catch problems early without having to check everything manually.
Consequences of Non-Compliance
Breaking FINRA 3270 rules leads to serious consequences. Small firms can be fined $5,000 to $77,000, while big firms might pay up to $200,000. If violations are serious or happen repeatedly, people might be suspended from working in the industry for anywhere from 10 days to 6 months – or even permanently banned.
Outside business activity software helps prevent these problems by automatically checking if rules are being followed and keeping records of everything. These record management solutions are important if regulators come to check or if there’s an investigation into wrongdoing.
Best Practices for Managing OBAs
Managing outside work well needs three main things:
- clear rules
- simple processes
- good technology
Firms should write down exactly what’s allowed and what isn’t, and regularly train employees on FINRA 3270 rules. Outside business activity software makes everything easier by automatically routing approval requests, using standard forms, and keeping track of important dates.
The software helps quickly spot risky activities and keeps a complete history of everything. Regular updates to both policies and software ensure everything stays current with new rules and emerging risks.
Final Thoughts
Following FINRA 3270 rules for outside work is crucial for financial firms. Modern outside business activity software makes this easier by providing the right tools. Clear policies and good technology help firms stay compliant while letting their employees pursue professional opportunities outside their main role.
