FINRA Eases Investment Adviser Order Allocation Rules
Published Date: 7/21/2026
Notice
Summary
FINRA is updating a rule about how investment advisers split big orders among accounts. Now, advisers won’t need special approval for these order splits, no matter when they give the instructions. This change affects investment firms and aims to speed up order processing without extra costs, starting once the SEC approves it.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Firms can auto-allocate IA block trades
FINRA proposes to remove the requirement that a qualified principal approve account allocations for investment-adviser (IA) bulk orders, regardless of when allocation instructions are received. Once the SEC approves the change, broker-dealers and other members may complete IA bulk order allocations through straight-through processing (STP) without pausing for principal sign-off, supporting timely T+1 settlement processing.
Fewer settlement delays for IA clients
If you invest through an investment adviser, the proposed change would let members allocate IA bulk orders without waiting for principal approval, which should reduce processing pauses and help meet T+1 settlement timelines (T+1 became effective May 28, 2024). FINRA says this will help avoid settlement delays and better meet adviser client expectations on allocation timing.
Small risk of allocation misuse (cherry-picking)
The rule change may increase the opportunity for misconduct like cherry-picking because principal approval for late allocation instructions would no longer be required. FINRA notes that only about 1.5 percent of allocations by trade count (3.5 percent by dollar volume) occur after trade date and that same-day allocation rates have risen to roughly 96%, and says existing safeguards (fiduciary duty, SEC/FINRA oversight, Rule 4515.01 prohibitions) remain in place to limit abuse.
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