Steps to Starting Up an Independent Broker-Dealer

If you want to become a broker-dealer, you can either join an existing firm or start your own company. If you choose to work for someone, you may be investing in a management team in which you know very little. Although the workload will likely be more manageable, you'll have less control over the organization and direction of the company.

There are many benefits to starting your own firm, though you should be aware of what's involved. Much like investing in your own startup, a new investment firm requires a lot of work, time, patience, and money. On one hand, you'll have control over the firm; on the other, it's a riskier endeavor that requires much more work.

If you've decided an independent firm is the way to go, here's some guidance on what's involved in achieving and growing a successful broker-dealer firm.

Like any other venture, there are some obvious benefits to going into business for yourself as a broker-dealer. First, there's the absence of bureaucracy that comes with working for someone else. Bureaucracies often lead to more formal and rigid systems that leave little room for innovation, putting rules in place that companies must adhere to strictly.

With your own firm, there's also the potential for significant wealth. You'll eventually need to decide what types of fees you wish to charge. If you decide to take a percentage of assets under management, you'll need a scalable business model, experienced management personnel, and solutions to attract and retain clients. While your income may be capped when working for a firm, there's often greater potential running your own.

If you have sufficient capital, you can decide to acquire an existing operation instead of starting a new firm. Though everything may be organized exactly how you'd like, there is the benefit of having a head start on registrations, market presence, staffing, and operations.

Before you start your own broker-dealer firm, there are several questions worth asking to ensure you're on the correct path to creating a successful firm. These questions include but aren't limited to:

If you've decided to acquire an existing broker-dealer firm, many of these requirements will already have been satisfied.

If you are starting your own broker-dealer firm and will not operate your company as a sole proprietorship, you must register your firm as an independent company to limit your personal liability. Some of these requirements include (and are discussed more in-depth later in this article):

Prior to operations, your broker-dealer firm must be registered with several regulatory bodies. In addition to the agencies below, there may be governing bodies specific to your location that have their own requirements.

The broader regulatory agencies to register with include but are not limited to:

Once approved by FINRA, you must become a member of a self-regulatory organization (SRO) before your order granting registration goes into effect.

There's a ton of paperwork to file as part of the process of setting up a broker-dealer firm. FINRA outlines a number of requirements. As part of the application process, the forms you must file include but are not limited to the following:

No, it's not a TV episode of a crime drama. Every employee for whom you file a U4 must be fingerprinted.

If you've made it this far, chances are you know what you're doing. However, you must demonstrate proficiency in order to land clients and retain them.

When developing your broker-dealer firm, don't underestimate the value of marketing, branding, and an online presence. Consider which social media platforms will provide your firm with the greatest exposure. Be prepared to distribute marketing and promotional materials to prospective clients.

On the more technical side, consider applying for a variety of broker dealer exams. There are several required credentials in order to obtain your broker-dealer license including successful completion of the following:

Broker-dealers are required to hold several credentials, and some credentials have prerequisite exams.

In addition, if you wish to sell additional securities or demonstrate further competency to prospective clients, consider pursuing additional exams.

Broker-dealers are required to assemble and maintain a variety of policies. Several policies include but are not limited to:

Broker-dealers are held to a high standard regarding record retention. Firms are required to maintain key data, documents, and a variety of support for many years. In addition, the data must be stored in a specific format and easily distributable to FINRA upon request. Trading data, as well as e-mail and communication data, must be retained.

Broker-dealer firms are required to maintain a fidelity bond. The fidelity bond acts as an insurance policy in excess of the firm's net capital requirement. Broker-dealer firms are also required to have their finances audited annually by a Public Company Accounting Oversight Board-accredited accounting firm.

FINRA implements net capital requirements that a broker-dealer must have on hand to remain in good standing. The net capital requirements vary based on the company's specific business lines.

Broker-dealers usually implement compliance software solutions. These solutions automatically track and maintain reporting requirements, issue deadline and compliance reminders, and monitor employee trading accounts.

FINRA requires all broker-dealers to designate a Chief Compliance Officer (CCO) to ensure company-wide compliance and regulation. FINRA also requires firms to have a Financial and Operational Principal (FinOp) (via the Series 27 exam) to compile reporting and accounting statements. These positions may be outsourced.

Once you submit your application to FINRA, FINRA must review and process your application within 180 days. It may take a substantial amount of time to accumulate and organize all information required as part of the application process.

The application process to be an independent broker-dealer is arduous. In addition to long application forms, there are a number of requirements that must be met before your firm begins operating, in addition to a number of requirements that must be met once your firm has clients.

There are many requirements to becoming an independent broker-dealer. A great starting place is forming your business. Pursue the appropriate business licenses for your local and state governing bodies. Then, consider pursuing memberships to the various required regulatory bodies, like FINRA and the SEC.

All of this information is likely overwhelming. FINRA has a reputation for ongoing requests for documentation and constant back-and-forth communication. However, if you get through the approval process and then plan your work and work your plan, the potential rewards for a successful broker-dealer firm are high.

14 underappreciated investment opportunities to snag in 2024, including one with 143% upside: Stifel

1. Buy Alector Inc

Ticker: ALEC

Price Target: $15

Potential Upside: 88%

"Alector, Inc. is a biotechnology company focused on developing novel medicines for neurodegenerative diseases. Alector is a pioneer in the nascent field of "immuno-neurology", an area of research focused on the interaction between the immune system and the brain."

"We are upgrading ALEC to Buy and raising our target price to $15. Bottom line: while Alzheimer's is of course very high risk, we think the probability-of-success for AL002 (TREM2 agonist) is above average, and we think the stock risk/reward is highly attractive ahead of ph2 data in 4Q24."

Source: Stifel Research

2. Buy Alphatec Holdings

"Over the last decade, the ATEC story has been one of multiple turnaround iterations and underperformance. Since 2017, however, with the appointment of Pat Miles to CEO, the company has found its footing, implementing multiple growth accelerating initiatives that are now manifesting in tangible, top-line momentum. Most important, we see a long runway for momentum, buoyed by portfolio innovation and sales channel optimization/expansion, and a now clearer path to breakeven and cash flow positive levels."

"Reflecting on ATEC's 2025 outlook through five different lenses our analysis suggests the new cash on hand could drive $700M in Surgical revenue in 2025, compared to $470M in ATEC's LRP (Stifel/Consensus at $582/577M). And, we see multiple avenues where this analysis could prove conservative. On profitability: assuming 10% of incremental Revenue upside can drop through to EBITDA, it implies a 2025 EBITDA of $100M+. Finally, using this same exercise extended out further, we see the possibility of ATEC reaching a $1B annualized revenue run-rate exiting 2026."

Source: Stifel Research

3. Buy Darling Ingredients

Ticker: DAR

Price Target: $123

Potential Upside: 143%

"Since the EPA's final RVO was announced on June 21, 2023, Darling's stock has underperformed its 2024E EBITDA revisions by 16%. Given DAR's self-funding ability and 2024 outlook, we believe the D4 RIN sell-off is overdone. While we agree that DAR's stock performance should have been negatively impacted by the D4 RIN collapse (Figure 1) and that D4 RINs could trade lower, we disagree on the magnitude of the decrease and the stock's fundamentals at present. Further, we believe investors are overlooking 2024 value drivers out of fear of near-term price/margin deterioration."

"In our view, DAR is the best vehicle to express a bullish view on low-carbon renewable diesel (RD) and sustainable aviation fuel (SAF). With Darling's control of 15% of the world's waste fats and greases and its 50% interest in Diamond Green Diesel, the company offers investors exposure to RD-SAF growth with best-in-class margins (implied vertically integrated EBITDA margin that is ~150% above the industry). In addition, the company has exposure to complementary specialty and industrial products businesses, including the high-growth collagen peptide market and green energy in Europe, which repurposes its waste streams into higher value, low carbon intensity products. Despite its advantaged business model, DAR trades at a ~1.6x discount to its closest peer (NESTE) due to depressed carbon credit market pricing (LCFS and RIN) and elevated financial leverage. With its best-of-breed business model and the upcoming macro (CARB and IRA 45Z policy) and micro catalysts (progression of SAF commercial terms), DAR is our top pick within the RD/SAF vertical."

Source: Stifel Research

5. Buy Globus Medical

Ticker: GMED

Price Target: $61

Potential Upside: 15%

"We believe GMED is arguably the "best-in-class" publicly traded Spine company, underscored by a decade-plus of crisp clinical and commercial execution driving sustained, well-above market growth and unmatched, 30%+ EBITDA margins. The story has evolved though, with the NUVA transaction bringing pessimistic sentiment and a discounted valuation. While acknowledging the risks of this transaction, we think GMED should get more credit than is currently being discounted and also believe, longer-term, that the combined companies could sustain higher growth than we (and others) currently project. With valuation near lows, it feels like the "bad" is adequately reflected, and the "good" represents real potential upside for investors."

"Except for the "COVID years", in January ahead of the company's national sales meeting, GMED has historically pre-announced 4Q results and provided year-ahead guidance. We think there is a reasonable likelihood this trend continues and argue this event will represent the first critical proof point underscoring that the NUVA integration is tracking on-plan, operationally and financially."

Source: Stifel Research

6. Buy Ingersoll Rand

Ticker: IR

Price Target: $73

Potential Upside: -4%

"Ingersoll-Rand's culture and IRX operating system is differentiated, and we think it will lead to differentiated performance over the long term. The company is well positioned to capitalize on the secular shift for businesses to operate more sustainably, and is itself a leader in operating its own business in a more sustainable way. We believe capital allocation is likely to be a source of value creation with significant financial flexibility and cash generation to deploy in the coming years."

"We are raising our rating to Buy on IR shares with a $73 target price. We view the recent pullback in IR shares, the expected improvement in U.S. and global short-cycle industrial demand, and Stifel's Chief Equity Strategist expectation for cyclical value (which would include IR) to outperform, as creating an attractive entry point for investors in this high quality industrial name and so are raising our rating to Buy."

Source: Stifel Research

7. Buy KBR

Ticker: KBR

Price Target: $71

Potential Upside: 29%

"KBR is likely the best growth story in the government services arena, given its strong domestic and international portfolio that pairs well with a ramping sustainable technology franchise. We expect the company to benefit from strength in energy markets and elevated geopolitical risk, which is leading governments to spend more on defense, logistics and other programs."

"KBR posted solid 3Q results and reaffirmed guidance in November, broadly inline with expectations. Then, during the earnings call, management walked back a long-standing 2025 adj-EPS target ($4.75) as a result of exogenous factors like interest rates, the company's share price (as it pertains to buybacks) and the ramp process for the marquee Global Household Goods contract (HomeSafe). That clearly spooked investors as the stock fell roughly 14% in trading after the earnings call. Now, the stock remains around 20% below recent highs and the question is whether the fundamental setup in 2025+ is truly that different than investors had previously contemplated. Our view is that it isn't, which we believe sets up a strong upside case on the back of weakened sentiment and more measured expectations but still healthy upside potential. As a result, we reiterate our Buy rating and highlight KBR as our top services pick for 2024."

Source: Stifel Research

8. Buy Leidos Holdings

Ticker: LDOS

Price Target: $N/A

Potential Upside: N/A

"In this month's contract exam, we highlight Leidos' $7.9B/10yr CHS-6 (Common Hardware Systems, 6th Generation) single-award IDIQ contract to provide the Army with "hardware systems, system management solutions, components, customizable sustainment strategies, non-personal services and continuous technology upgrades." Leidos beat two other competitors in its bid for the contract, which is a follow-on to General Dynamics' $3.9B/5yr CHS-5 and represents a considerable win for Leidos' Defense Solutions business. At this point, we don't think the contract has been baked into estimates and, as such, could provide up to 2.5% upside to the current consensus sales estimate for FY24, assuming a drawn-out protest phase does not ensue. In this note, we provide some context on what the contract is and what we think it could mean to Leidos' bookings and growth."

"Simply put, we don't believe expectations have been revised to consider the additional growth from CHS-6. The expected completion date for this contract is 8/30/33, indicating 10 years from August 30, 2023; however, we don't think the contract will begin immediately and expect General Dynamics, the incumbent, will seek to, at minimum, delay the handover. Even if that does happen, we would anticipate 2024 sales from CHS-6."

Source: Stifel Research

9. Buy Maximus Inc.

Ticker: MMS

Price Target: $102

Potential Upside: 23%

"Maximus is positioned to benefit from emerging tailwinds across its U.S. Federal business from VA exam demand and new contract ramps and should see improvement in its U.S. Services business as redeterminations for Medicaid resume in earnest. Combining those tailwinds with likely improvement across the company's international segment should drive margins toward the high-end of the industry and create upside to earnings through at least FY24, in our view."

"Maximus is heavily exposed to government health customers, which helps insulate the company from discretionary budget austerity, and is seeing strong demand tailwinds across the majority of its portfolio. That leads us to see recent share price weakness as a buying opportunity following the end of the company's fiscal year as we think guidance will reflect material tailwinds from VA disability exams, Medicaid redeterminations, student loan servicing and new technology modernization contracts. That should result in at least mid-single-digit organic growth and substantial margin improvement that we think can help increase adj-EPS by 35-40% in FY24. Given we see the setup as having high-probability earnings drivers, we think there is also multiple upside."

Source: Stifel Research

10. Buy Philip Morris International

Ticker: PM

Price Target: $108

Potential Upside: 13%

"We continue with our Buy rating, as PMI maintains one of the strongest growth profiles amongst its Consumer Staples peers. Also, the acceleration on both a sales and EPS basis, driven by the development of its reduced risk products (RRPs), provides upside potential to its growth outlook. We believe there is a solid case for ownership of PM, given the strong and accelerating growth profile of IQOS, supporting robust long-term growth for the business alongside a discount valuation. We believe the strong free cash flow generation, which the company returns to shareholders in the form of a top-tier dividend (pushing up to over 5% yield), provides solid downside support for the shares."

"PMI's existing U.S. business is already contributing nearly $1 billion to total company operating profit and we expect the business to grow substantially in the coming years supported by continued growth in ZYN and the introduction of IQOS beginning early 2024. We outline the path to more than doubling the ZYN business over the next three years and the opportunity for IQOS in the U.S. The U.S. currently generates nearly $1 billion in operating profit and PMI's medium term guidance includes growing volume, revenue, and operating profit at a double-digit rate over the next three years while investing behind their smoke-free products in the market. We believe the current strength of the U.S. business behind ZYN and the growth potential through the combination of ZYN and IQOS is underappreciated by investors. We continue with our Buy rating and $108 target price."

Source: Stifel Research

11. Buy Six Flags

Ticker: SIX

Price Target: $32

Potential Upside: 33%

"Based on our updated SIX/FUN merger model, we believe the newly formed company would be worth $60-$80 depending on what multiple you are willing to ascribe the combined entity. We believe a fair trading range would be 8x-10x forward EBITDA based on historical trading/take-out levels, a more geographically diverse company, scale benefits, and cleaner operating model. This would imply SIX shares are worth $29-$39 and FUN units are worth $31-$41 in today's trading terms. Based on current trading levels we believe the risk/reward is much more compelling owning shares of SIX versus FUN. While we do believe there is upside to owning either/or, we see more upside/catalysts with SIX shares versus FUN units."

Source: Stifel Research

12. Buy Sitio Royalties Corp.

Ticker: STR

Price Target: $33

Potential Upside: 40%

"In our view, Sitio offers investors exposure to the best geology in the Lower 48 while maintaining geographic and operator diversification. Qualitatively, Sitio offers investors scale and a differentiated focus on acquiring minerals in the core of major oil basins with the lowest cost of supply under quality operators. In our view, the company's highly targeted acquisition strategy provides it with advantaged visibility into the prospects of near- and medium-term development irrespective of commodity volatility and political environment. Quantitatively, we estimate Sitio can return 100% of its enterprise value by 2030, offering significant value now and potential upside in the future. Overall, the company's technical expertise and ability to take advantage of accretive deals in the near term with ground game capital provide a differentiated investment opportunity."

Source: Stifel Research

13. Gene Editing Stocks

"Gene editing names have been broadly weak this year, but in particular, we think base editing names - BEAM (Buy, $17.47) and VERV (Buy, $9.41) - have shown pronounced weakness. The downside move was especially amplified by, in our view, BEAM's portfolio re-prioritization and restructuring announcement yesterday. While the headlines may come off as negative at first pass, we wonder if the broad downside moves for both base editing names have been excessive. In fact, by our model, current share prices (~$18/shr for BEAM, ~$10/shr for VERV) are approximately 20-40% above their respective cash levels. And with key data readouts on the near-to-medium term for both companies, investors with a longer time horizon may find a more intriguing entry point for such names. Cash levels are fleeting and will reduce over time for these non-profitable companies, but considering their respective technologies remain intact (as far as we're aware), we believe the fundamentals for both remain unperturbed at this point."

"As far as we know, fundamentals seem intact. For gene editing, regulatory has elevated as a key risk to the investment thesis. However, several developments can help provide some clarity here. First, NTLA (Buy, $26.94) now has two INDs - NTLA-2001 and NTLA-2002 - that should challenge the idea that the FDA will never approve gene editing drugs. Second, exa-cel is approaching both its advisory committee (Oct 31) and PDUFA date (Dec 8), both of which can offer incremental clarity, if not lift the overhang. Third, VERV's Ph.1 heart-1 data expected as a late-breaker at the American Heart Association (AHA) and BEAM's reiterated guidance for BEAM-101 update in 2024 speak favorably to the underlying fundamentals. Net-net, we understand that risks are there, but remain optimistic in these names despite current levels."

Source: Stifel Research

14. Engineering Services Firms

"As we head into late 2023, engineering services firms remain positively exposed to macro tailwinds which include rising global infrastructure spending, rising environmental and water spending and rising investment in advanced facilities and manufacturing. The fact that these tailwinds exist is known, but how and when additional spending will materialize into sales we think is less clear to investors. In this note, we walk through (1) industry structure and employment trends, (2) economic sensitivity and the setup into a potential recession, (3) specific infrastructure packages and how to think about the cadence of spending growth and (4) our view on valuation. We believe 2024 will be a strong year for the sector and see evidence supporting mid-to-high single digit organic growth and pricing power improvement, both of which could lead to more upside for the group. We are Buy-rated across our engineering services exposed coverage (KBR-$58.48, PSN-$57.08, J-$131.77) with KBR as our top overall pick, Jacobs as the best GARP opportunity and Parsons as the growth play in the sector."

Source: Stifel Research

Supreme Court Decisions Loom Over Consumer Watchdog’s 2024 Plans

The US Supreme Court will have a big say in whether the Consumer Financial Protection Bureau succeeds next year in reshaping how banks handle customer data and charge fees.

Consumers would have an easier time sharing their financial data and switching banks, and would get caps on credit card fees under final rules the CFPB plans to issue in the coming year. The agency has also started writing key rules set to advance in 2024 that would restrict fees for overdrafts and insufficient funds, and redefine the credit reporting industry.

But those ambitious efforts fall in the shadow of existential threats to the CFPB and its rulemaking authority. The Supreme Court is expected to rule in the coming months in one case challenging the CFPB’s independent funding mechanism through the Federal Reserve, and in a second that could make it easier to challenge any federal agency’s rules in court.

With those developments in the offing, 2024 is shaping up to be one of the most consequential years yet in the CFPB’s 12-plus years of existence. For now, the agency is moving full steam ahead.

“I’ve seen no evidence of a slowdown in response to the risk that the Supreme Court rules against the bureau,” said Eric Mogilnicki, a partner with Covington & Burling LLP who has worked with clients facing CFPB regulatory and enforcement actions.

The Supreme Court heard oral arguments in October in CFPB v. Community Financial Services Association of America, a case out of the US Court of Appeals for the Fifth Circuit that found the CFPB’s independent funding violates the Constitution’s appropriations clause. The CFPB currently requests money directly from the Federal Reserve, rather than going through the annual congressional appropriations process.

Enough conservative justices expressed skepticism about the Fifth Circuit’s ruling that observers believe the CFPB’s funding will escape being deemed unconstitutional.

“The speculation is that they’re not going to do something wild, like blow up the CFPB. I’m not even sure, writ large, the industry would want that outcome,” said Jonice Gray, a Paul Hastings LLP partner who works with financial services institutions.

Read More: CFPB’s Survival Odds Improve After Supreme Court Hears Challenge

A ruling in favor of the CFPB would revive its long-gestating rule to restrict the way payday lenders access customer bank accounts. The CFPB appropriately followed administrative procedures when issuing the rule, the Fifth Circuit said in its October 2022 decision on the payday lenders’ challenge; the Supreme Court declined to take up that question.

Along with the payday lending rule, a host of enforcement actions snaking through federal courts would return to life should the CFPB win at the Supreme Court. That includes a rule mandating the collection of demographic data for small business borrowers that has been on hold pending the outcome in the CFPB funding case. However, lenders will likely launch a procedural challenge to the rule should the existing stay end.

Oral arguments aren’t always a good predictor of Supreme Court outcomes, so justices could still rule against the CFPB.

The court could, for instance, find a way to let all existing CFPB rules and enforcement actions stand while striking down the agency’s funding mechanism. Or it could simply declare all the agency’s past work to be invalid. In either case, Congress would be tasked with funding the CFPB in future years.

The Supreme Court’s conservatives could use a separate case to clip the wings of all federal regulators, even if it allows the CFPB’s funding to survive.

The high court in January is set to hear oral arguments in a pair of cases, Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce, that could allow the court’s conservative majority to whittle down or even eliminate a doctrine known as Chevron deference. That doctrine, established in 1984, says judges should defer to expert regulatory agencies’ interpretations of ambiguous statutes.

Read More: Supreme Court to Hear Big Challenge to Agency Powers in January

A ruling overturning Chevron deference would open up challenges to many existing regulations, including those issued by the CFPB, said Chris Willis, the co-leader of Troutman Pepper Hamilton Sanders LLP’s consumer financial services regulatory group.

“It calls into question the validity of a lot of regulatory interpretations and regulations themselves that have been in place for decades,” he said.

The CFPB was busy in 2023, even with a slew of legal challenges looming large, and 2024 should see the fruits of that work.

The agency says it intends to wrap up rules required under Section 1033 of the Dodd-Frank Act that would require banks to allow customers to easily transfer their financial data to third-party companies, including fintech startups.

The so-called open banking rule has the potential to dramatically reshape consumer financial services, CFPB Director Rohit Chopra says.

Read More: Banks Must Share Data With Rivals Under CFPB Proposed Rules

The rule, scheduled to be completed in the fall, will apply only to deposit and credit card accounts at first. But the CFPB says it wants to expand open banking to mortgages, student loans, and other financial products.

“As that approach is expanded over time, first to smaller and smaller institutions and then eventually to other rulemakings and other types of products, I do think that the creation of this open banking system is going to change the competitive dynamic,” said David Stein, of counsel at Covington & Burling and a former CFPB official.

The CFPB so far has seen only muted criticism of its approach to open banking, even from Republicans in the House of Representatives who are typically critical of the regulator. Chopra has also sounded open to making some changes pushed by GOP lawmakers.

Banks and fintechs will likely find different parts of the rule to endorse, giving it potential staying power, said Kari Hall, a Paul Hastings financial services partner.

“It goes beyond the banks. It’s much more far-reaching and I think, frankly, you’re going to have some supporters for parts of it in different areas,” she said.

The CFPB is also set to finalize a rule subjecting the largest digital payments providers and digital wallet operators to direct supervision by agency examiners. CFPB officials have declined to name the companies that would be subject to the rule, although the November proposal is expected to cover 17 companies.

Chopra has said that many of the companies included in the rule would be household names, and analysts expect Alphabet Inc.‘s Google unit, which operates Google Pay, and Apple Inc. to fall under the new standard.

Read More: Meta, Apple at Risk of Greater Regulation of Digital Wallets

Those companies are already subject to CFPB enforcement actions. But putting them under regular CFPB examinations will have an even bigger impact on how they operate, for fear of having an examiner discover illegal or even borderline conduct, said Jenny Lee, a former CFPB enforcement attorney.

“It will change their behavior regardless of whether anyone does an exam,” said Lee, the founder of tech-focused firm Tessellate Law.

A contested bid to cap credit card late fees at $8 also awaits final CFPB action. Existing rules allow credit card companies to charge a $30 fee for a missed payment, and $41 if a customer misses another payment in the next six months.

The move is part of the Biden administration’s broader attack on so-called junk fees, and a final rule is expected in January or February. Some analysts say it could be tied to President Joe Biden’s State of the Union address.

Banking trade groups have already raised questions about the process the CFPB used to write the rule, including its decision not to engage a small business review panel. In addition, cutting late fees will force credit card companies to roll back or eliminate popular rewards programs, the industry groups say.

Most observers expect a lawsuit soon after the rule is finished.

“Ultimately, our sense is that the courts will have the final say on this rule given ongoing challenges to the Bureau’s funding structure and litigation that will follow finalization of this rule,” wrote Isaac Boltansky, the director of policy research at brokerage BTIG LLC in Washington.

The CFPB has started work on significant new regulations, even as it wraps up other key rules.

Bank fees for overdraft and insufficient funds would be limited, for instance, under new proposals the regulator is eyeing, setting up a clash with lenders over billions of dollars in annual revenue.

Read More: US Takes Aim at Banks’ Billions of Dollars in Overdraft Fees

The CFPB is also working on an overhaul of implementing rules for the 1970 Fair Credit Reporting Act, according to an outline submitted in September to a small business review panel. Among the highlights are potential limits on the use of medical debt and new restrictions on data brokers, such as classifying them as credit reporting companies.

Some supporters of the credit reporting industry have pounced on the agency’s outline, including a proposal to limit how data brokers sell “credit header data” to lenders and others under the federal credit reporting law. That data, such as a person’s name and address, is important for verifying identities as well as for immigration and law enforcement, critics say.

Read More: CFPB Eyes Broad Expansion of Federal Credit Reporting Standards

A full credit-reporting proposal will come several months after the small business review panel finishes reviewing the CFPB’s outline and provides feedback.

“The FCRA one is the biggest one that could hit the industry,” Troutman Pepper’s Willis said.