The SEC approved a FINRA temporary rule amendment that allows member firms to complete their inspection obligations remotely through calendar year 2021.
As previously covered, FINRA proposed to adopt temporary Supplementary Material .17 under FINRA Rule 3110 ("Supervision") to permit the use of remote inspections to satisfy the obligations set out in Rule 3110(c)(1)(A), (B) and (C) that require each member to conduct an annual office inspection.
Rule 3110.17 provides that a member firm (i) amend its written supervisory procedures under Rule 3110(b)(1) to reflect changes in its procedures, (ii) impose additional supervisory procedures if red flags are identified during the remote inspection, and (iii) maintain centralized records that identify the remote inspection and any imposed additional supervisory procedures.
The rule change is effective immediately.
- SEC Notice of Filing and Immediate Effectiveness: Proposed Rule Change to Adopt Temporary Supplementary Material .17 ("Temporary Relief to Allow Remote Inspections for Calendar Year 2020 and Calendar Year 2021") under FINRA Rule 3110 ("Supervision")
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