FINRA requests extension of rule allowing remote office inspections

On Behalf of | Jan 14, 2022 | FINRA Compliance

The Financial Industry Regulatory Authority is requesting an extension of a temporary rule that permits the brokerage industry to conduct remote inspections of their branch offices, InvestmentNews reports.

Under FINRA Rule 3110, member firms are required to maintain a system of supervising the activities of their personnel to ensure compliance with securities laws and regulations. But during the COVID-19 pandemic, the temporary rule was implemented to relieve firms of the obligation to perform on-site, in-person inspections amid the challenges of the health crisis.

The remote-inspection rule was initially extended through June 2022. In a proposal submitted last week to the Securities and Exchange Commission, FINRA has now asked that it be extended again to the end of this year. The proposal noted that many firms continue to face operational challenges due to the pandemic that would hinder their ability to conduct inspections on-site at their locations.

The Securities Industry and Financial Markets Association, which represents many brokerages, has supported the remote branch office inspections. The SIFMA said it had also discussed the possibility of making the program permanent, given that many firms continue to operate remotely.

FINRA’s request for another extension of the rule must still be approved by the SEC.

The FINRA investigations attorneys at Lewitas Hyman understand the complexities that come with being the subject of a regulatory inquiry by the SEC, FINRA and other self-regulatory organizations, and we have the experience to guide and advise you through any type of regulatory investigation. If you are the subject of a regulatory proceeding, contact us at (312) 291-4600 or through our online contact form for a free consultation.

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