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🤝 Employee Conduct & Reportable Events · Lesson 1 of 5 · 5 min

Side Hustles: Tell Your Firm First

🍕 Weekend pizza delivery, a seat on a company board, a paid podcast. Which ones does your firm need to hear about? Under today's rule, most of them.

💡 Key idea

Today (Rule 3270): prior written notice to the firm before any outside business activity; passive investments exempt. Rule 3290 replaces it on Oct 25, 2027.

🧠 Why it matters

Under FINRA RULE 3270 (the rule the SIE outline cites, in force today), a REGISTERED person may not be an employee, officer, director, partner, sole proprietor or contractor of another business, or be paid by one, without giving PRIOR WRITTEN NOTICE to the firm in the form the firm requires. The rule does not require approval, but the firm must assess the activity: could it interfere with your job, confuse customers, or really be a securities transaction (then Rule 3280 applies)? The firm may restrict or prohibit it. PASSIVE INVESTMENTS are exempt. Change coming: the SEC approved new FINRA Rule 3290 (Outside Activities) on Sept 15, 2026; it replaces 3270 and 3280 on OCTOBER 25, 2027 and drops notice for non-investment jobs like bartending.

📈 In the real world

🎙️ Lena, a registered rep, is offered $500 an episode to co-host a personal-finance podcast. Before saying yes she emails compliance on the firm's outside-activity form. Compliance reviews the show's plan, adds conditions on discussing specific securities, and lets her proceed. Notice first, mic second.

📌 Takeaways

  • Rule 3270: prior written notice, in the firm's required form
  • The firm assesses and may limit or prohibit the activity
  • Passive investments are exempt; Rule 3290 takes over Oct 25, 2027

📖 Terms in this lesson

Outside business activity: Paid or business work outside the firm that a registered person must notify the firm about in writing beforehand (Rule 3270; Rule 3290 replaces it October 25, 2027).

✅ Test yourself

Under FINRA Rule 3270, before a registered rep starts a paid outside job, she must:
  1. Get written approval from FINRA
  2. Give prior written notice to her firm
  3. Notify her state regulator within 30 days
  4. Amend Form U5 and wait for clearance

Answer: B · Give prior written notice to her firm

Rule 3270 requires prior written notice to the member firm. FINRA does not approve side jobs, and Form U5 is a termination form. (The firm reviews the activity and may restrict it.)

Which activity is exempt from Rule 3270's notice requirement?
  1. Serving as a paid director of a company
  2. Owning shares of a public company
  3. Working weekends at a hardware store
  4. Teaching a paid evening class

Answer: B · Owning shares of a public company

Passive investments, such as owning publicly traded shares, are exempt. Paid teaching, directorships and part-time jobs are outside business activities that require prior written notice today.

As of November 2026, what is the status of FINRA Rule 3290 (Outside Activities)?
  1. Still a proposal awaiting a vote by the SEC
  2. Approved by the SEC; it takes effect October 25, 2027
  3. Withdrawn by FINRA after public comment in 2026
  4. In effect since January 1, 2026, replacing 3270

Answer: B · Approved by the SEC; it takes effect October 25, 2027

Regulatory Notice 26-20 announced SEC approval (Sept 15, 2026) and an effective date of October 25, 2027. Until then Rules 3270 and 3280 apply, and the SIE outline still cites them.

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