FINRA has adopted amendments to Rule 4515.01 that remove the requirement for a principal to review and approve allocations of investment adviser bulk orders when the allocation instructions arrive after trade date. The SEC approved the rule change on September 2, 2026. The amendments take effect on November 16, 2026. FINRA describes the change as part of its FINRA Forward initiative to modernize its rules, guidance and processes.
What the rule said, and what it says now
Rule 4515 requires a member to identify the account for a customer order before the order is executed. Where the account on an order changes, a qualified principal generally has to authorize the change, and the facts the principal relied on must be documented and kept. Supplementary Material .01 carved out an exception for orders an adviser places for more than one customer account: no principal approval was needed if the adviser delivered its allocation instructions by the end of trade date.
The amendment deletes that timing condition. The struck text is the proviso that members receive specific account designations or customer names from the adviser no later than the end of the day on the trade date. Everything else in the exception stays. It still applies only where there is more than one customer on the order. It covers outside advisers and associated persons who provide advisory services on behalf of a member that is itself acting as an adviser. The adviser must be registered under the Investment Advisers Act, or be one that would have to register but for Section 203(b) or 203A. And it does not reach accounts handled by individual registered representatives who exercise discretion under Rule 3260.
So from the effective date, a late allocation on a qualifying adviser bulk order is processed the same way as an on-time one. No principal sign-off. No documented essential facts for that change. The timing of the instruction stops being the trigger for supervisory review.
Why FINRA made the change
One stated reason is the shorter settlement cycle: advisers now have less time to send allocation instructions. FINRA notes that most instructions already arrive by the end of trade date and so already sit outside the approval requirement, but some do not. The notice says the amendments are meant to remove operational burdens that can delay allocation processing, and the risks that come with delay, while keeping the investor safeguards in place. In FINRA’s words, the amendments “preserve investor protections while removing unnecessary burdens in light of technological advances in the processing of allocations.”
Our reading is that FINRA has concluded that a principal reviewing a late allocation on the day after the trade was adding a step, not a control. The approval was a timing gate, and timing is now policed by other rules. The substantive risk in adviser allocations, an adviser steering good fills to favored accounts after seeing how the trade did, was never something a signature on the following day could reliably catch. The amendment appears to accept that and leaves the substantive prohibition exactly where it was.
What still applies
Readers will see that principal approval has been eliminated and over-read it. The gate is gone; the obligation is not. The rule’s prohibition is unchanged: a member may not knowingly facilitate an allocation that is inconsistent with both the adviser’s intent, at the time of execution, to allocate on a percentage basis across the participating accounts, and the adviser’s fiduciary duty to those accounts. That prohibition reaches allocations driven by how the trade performed between execution and allocation.
Two more points. First, FINRA reminds members of their obligations under Exchange Act Rule 15c6-2(a). In plain terms, that rule obliges a broker-dealer to have written agreements with its counterparties, or reasonably designed written policies and procedures, aimed at getting allocations done by the end of trade date and sooner where the technology permits. The deletion in Rule 4515.01 does not relax that. A late instruction is now easier to process; it is still a miss against the trade-date target the firm’s own procedures are meant to achieve. Second, the amendment is to the supplementary material; FINRA describes it as an expansion of the existing exception to all adviser bulk orders, whenever the instructions arrive. Account changes that fall outside the exception, including anything on a Rule 3260 discretionary account, still need a principal and a record.
The gate is gone; the obligation is not.
What changes in practice is where detection happens. With a principal in the loop, a firm could point to a sign-off as its control against cherry-picking on late allocations. From the effective date that sign-off will not exist for qualifying orders. The “knowingly” standard in the rule likely means an examiner will ask what the firm had in place to notice an allocation pattern that favored some accounts, and we expect that question to land on surveillance and exception reports rather than on approval records.
What firms should do
Revise your supervisory procedures before November 16, 2026. Strike the end-of-trade-date trigger from the Rule 4515 section, state that the prohibition on knowingly facilitating non-percentage or performance-based allocations is unchanged, and name the control that replaces principal review. A procedure that still describes a sign-off the firm no longer performs is worse than no procedure at all.
Map which adviser counterparties qualify. The exception reaches advisers registered under the Advisers Act or exempt under Section 203(b) or 203A, and associated persons acting for the member as an adviser. It does not reach registered representatives trading on discretion under Rule 3260. Keep a list, confirm registration status at onboarding, and refresh it when a counterparty’s status changes.
Build post-execution allocation surveillance. Compare each allocation to the adviser’s stated percentage intent at the time of the order. Flag any allocation that moves shares between accounts after the fill, and any pattern in which accounts allocated late did better than accounts allocated on time. Set a review cadence, assign an owner, and record how exceptions were resolved. A small firm without a full compliance department can get this designed and run through Taft’s fractional compliance team, which drafts the procedure changes and builds the exception reporting alongside the firm’s operations staff.
Check your Rule 15c6-2(a) arrangements. Confirm that written agreements with adviser counterparties, or your own written procedures, target completion of allocations by the end of trade date. Track late allocations as exceptions and escalate repeat cases to the adviser’s chief compliance officer.
If you are the RIA sending the orders, note that the broker-dealer’s approval step for late allocations will no longer exist. Your own record of pre-trade allocation intent becomes the primary evidence that allocations were fair. Record that intent before execution and retain it with the order.
Finally, train principals and operations staff on the new boundary. Principals should know which account changes still need their approval and which no longer do, and should be able to show the records that support both. The documentation an examiner is likely to ask for is set out in Taft’s guide to audit readiness best practices for financial firms. Taft helps firms write the procedures, build the surveillance and assemble the file; it does not give legal advice, and firms with questions about their fiduciary exposure on allocations should take that to counsel.
Sources
Taft does not provide legal advice. Content is for informational purposes only and subject to regulatory guidance.