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FINRA developing new proposals regarding remote work rules

On Behalf of | May 26, 2023 | FINRA Compliance

New plans are being developed by the Financial Industry Regulatory Authority with regards to its remote work rules, ThinkAdvisor 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 after the start of the COVID-19 pandemic, FINRA amended the rule to relieve firms of the obligation to perform on-site, in-person inspections as more work shifted to remote locations.

Last week, FINRA President and CEO Robert Cook said the authority is also preparing a proposal to protect information about private residences that are being used as remote work offices. At FINRA’s annual conference in Washington, D.C., Cook said the plan to be filed with the Securities and Exchange Commission would suppress the disclosure on BrokerCheck of the street address of a registered branch office identified to FINRA as a private residence.

Previously, the authority filed a Residential Supervisory Locations (RSL) proposal with the SEC that would allow a broker working remotely to supervise other brokers without the broker’s home being designated as a branch office. The RSL would be subject to examination by the parent brokerage once every three years instead of the annual inspection that must be performed at an office of supervisory jurisdiction.

The plan was amended in April to set forth certain conditions for a home office to be considered a non-branch residential supervisory location.

At the annual conference, Cook also said FINRA will renew efforts to update its Rule 3270, governing brokers’ outside business activities. He said the changes would be aimed at bringing more clarity to the rule and “focus on areas that really need to be reported.”

The 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 (844) 651-2641 or through our online contact form for a free consultation.

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