How to Start a Brokerage Firm: US Broker-Dealer Steps

"Brokerage firm" in the US usually means a securities broker-dealer: a firm that buys and sells stocks, options or other securities for customers. It is one of the most regulated routes into trading, and very different from an evaluation prop firm, which sells simulated challenges and holds no customer accounts. This guide sets out the US broker-dealer route step by step, with the regulator's own figures checked on 12 October 2026.

If you are weighing routes, our guide on how to start your own trading firm compares four of them, how to start a forex brokerage covers currency and CFD brokers, and how to start a prop firm covers the evaluation model.

What registrations does a US brokerage need?

Four layers, filed in roughly this order. The SEC's Guide to Broker-Dealer Registration says a firm registers on Form BD through FINRA's Central Registration Depository, "must become a member of FINRA, unless it qualifies for the exemption in Rule 15b9-1", and that "every registered broker-dealer must be a member of the Securities Investor Protection Corporation". It adds that "every state has its own requirements". The SEC charges no Form BD fee and must grant registration or begin denial proceedings within 45 days of a complete application.

• SEC: Form BD via the CRD system.
• FINRA: New Membership Application (Form NMA) and supporting documents that meet the Standards for Admission in Rule 1014.
• SIPC: membership for every registered broker-dealer.
• States: registration in each state where you do business.
• People: Form U4 for each associated person, and the qualification exams for their roles.

How long does FINRA take, and what does it cost?

FINRA says it "must review and process" a New Membership Application "within 180 calendar days". Staff first check that the application is substantially complete, then assess it against 14 standards, hold a mandatory membership interview, and decide to grant, grant with restrictions or deny. In practice the clock starts only when the file is complete, so prepare the written supervisory procedures, business plan and financials before you file.

FINRA's application fee depends on the number of registered persons. The schedule below is from Section 4 of Schedule A to FINRA's By-Laws; FINRA adds USD 5,000 if the firm will clear and carry accounts.

How much net capital does a brokerage firm need?

It depends on what the firm touches. SEC Rule 15c3-1 sets minimum net capital by business model. A firm that never receives or holds customer funds or securities can start at USD 5,000; a firm that carries customer accounts needs at least USD 250,000. Net capital is not a fee: it must be in the firm and computed under the rule at all times.

• Fidelity bond: FINRA Rule 4360 requires cover of the greater of 120% of required net capital or USD 100,000 for firms with a net capital requirement under USD 250,000.
• SIPC: protects customers up to USD 500,000, including a USD 250,000 limit for cash, per SIPC.

Who do you need to hire or qualify?

Registered representatives and principals must pass FINRA exams before working in those roles; FINRA says "an individual must pass the exams prior to engaging in those areas of the business". The common set for a small general securities firm is the Securities Industry Essentials (SIE, USD 100 in exam fees), the Series 7 representative exam (USD 395), the Series 24 principal exam (USD 235) and the Series 27 financial and operations principal exam (USD 235), per FINRA's exam pages.

Most new firms also sign a fully disclosed clearing agreement with an established clearing broker, which holds customer accounts and settles trades. That keeps the new firm in a lower net capital tier and out of custody, at the cost of the clearing firm's fees and minimums.

What has changed recently for retail brokerages?

The pattern day trader rule. On 14 April 2026 the SEC approved FINRA's proposal to "eliminate provisions relating to 'pattern day traders'... and the minimum equity requirement of $25,000 for pattern day traders", replacing them with intraday margin standards. FINRA's rulebook shows the amendment effective 4 June 2026, with an optional phase-in for firms that need more time, so check how your clearing firm applies it. This matters to stock prop firms too; see the stocks launch page.

Is a brokerage the right business for a trading founder?

Only if you want customer accounts and can carry the compliance team that comes with them. A broker-dealer needs supervisory procedures, books and records, anti-money-laundering controls, net capital computations and audits from day one. Many trading founders instead start an evaluation prop firm, which holds no customer money, or become an introducing broker for futures. Compare budgets with our launch cost calculator and the budget page.

A brokerage website also carries more rules: FINRA communications rules, BrokerCheck links and SIPC disclosures. PipValley builds websites for prop firms and the trading businesses next to them; see websites for hedge funds and trading firms. We have not yet built a broker-dealer site for a client and say so up front.

Questions

Sources

1. SEC: Guide to Broker-Dealer Registration
2. FINRA: After you apply (new member applications)
3. FINRA: Register a new broker-dealer firm
4. FINRA By-Laws Schedule A, Section 4: Fees
5. FINRA: Qualification exams
6. 17 CFR 240.15c3-1: Net capital requirements for brokers or dealers (Cornell LII)
7. FINRA Rule 4360: Fidelity bonds
8. SIPC: Our mission
9. SEC order approving SR-FINRA-2025-017 (Rule 4210 intraday margin, 14 Apr 2026)
10. FINRA Rule 4210: Margin requirements