SEC Approves FINRA Rule 4515.01 Amendment: Principal Approval Requirement Removed for Investment Adviser Bulk Order Allocations

Effective Date Pending FINRA Regulatory Notice

On September 2, 2026, the SEC approved FINRA's amendment to Rule 4515.01, eliminating the timing condition that limited the rule's exception from principal approval for bulk order allocations submitted by investment advisers. The Commission published the order in the Federal Register on September 8, 2026, and received no comments on the proposal.

The amendment is approved but not yet operative. FINRA lists the filing among approved rule changes pending determination of an effective date and will announce that date through a Regulatory Notice. Treat the current period as preparation time, not relief.

What Changed

FINRA removed the language conditioning the exception on receipt of specific account designations or customer names no later than the end of the day on the trade date, and replaced it with "without the principal approval required by this Rule." The exception now reaches all qualifying investment adviser bulk orders regardless of when allocation instructions arrive. FINRA confirmed that the change applies to delivery versus payment and receive versus payment arrangements, and to prime brokers that receive allocation instructions directly from the adviser.

Why the SEC Agreed

The Commission pointed to two developments since FINRA adopted Rule 4515 in 2002. With T+1 settlement, which took effect on May 28, 2024, the Rule placed an added a burden on firms monitoring late trade allocations to timely, manually, review them, because it conflicted with straight-through processing which now automates much of the trade lifecycle. The SEC found that the end-of-day condition created settlement risk when advisers waited on client approvals or new account setup, and concluded that removing it reduces operational burdens while preserving investor protection safeguards.

	Prior Rule 4515.01	Amended Rule 4515.01
Principal approval trigger	Exception applied only if the member received the adviser's specific account allocation instructions by end of trade date	Exception applies to all adviser bulk order allocations, regardless of when instructions arrive
Late allocations	Required principal approval and written documentation before the account name or designation change	No principal approval required solely because instructions arrived after trade date
Anti-fraud and fiduciary backstop	Members prohibited from knowingly facilitating allocations inconsistent with the adviser's intent at execution or its fiduciary duty	No change
Exchange Act Rule 15c6-2(a)	Applies independently of Rule 4515.01	No change
Exchange Act Rule 17Ad-27	Requires straight-through processing procedures for central matching services	No change
Advisers Act Section 206	Adviser anti-fraud obligations reach allocation practices	No change
FINRA Rules 2010 and 3110	General conduct and supervision obligations apply	No change

What This Means For Broker-Dealers

Principal approval becomes optional, not prohibited. Firms that find supervisory value in the review may keep it.

• Review your WSPs and update them to reflect the amended standard, timed to FINRA's effective date.
• Evaluate exception reports built around the prior end-of-trade-date trigger.
• Confirm Rule 15c6-2(a) controls remain current, since that obligation operates independently of Rule 4515.01.
• Maintain surveillance capable of identifying unusual or potentially abusive late allocations. FINRA adopted Rule 4515 in 2002 to address abuses including cherry-picking, and Rule 4515.01 continues to prohibit members from knowingly facilitating allocations that conflict with the adviser's intent at execution or its fiduciary duty.

What This Means For Investment Advisers

Removing principal review shifts practical weight onto adviser-side controls.

• Review trade aggregation and allocation policies.
• Document allocation methodologies and confirm your firm follows them.
• Test allocations on a defined schedule and fold that testing into your annual Rule 206(4)-7 review.
• Examine post-execution reallocations. The SEC Division of Examinations named allocation practices a priority in its Fiscal Year 2026 Examination Priorities.

How Bates Group Helps

When a supervisory control comes off a process, exam risk moves rather than disappears. Bates Group helps broker-dealers and investment advisers revise written supervisory procedures, redesign exception reporting, and test allocation practices before examiners review them. Contact Bates Group to discuss readiness ahead of FINRA's effective date.