Finra seeks to extend remote branch office inspections through end of year

Finra seeks to extend remote branch office inspections through end of year
Finra says member firms are experiencing 'operational challenges' due to the pandemic that make in-person examinations difficult.
JAN 11, 2022

Finra wants to allow brokerages to conduct remote inspections of branch offices through the end of the year.

A temporary rule in response to the coronavirus pandemic has relieved Financial Industry Regulatory Authority Inc. member firms of the onsite, in-person inspection requirement. Last fall, the measure was extended through June.

On Monday, Finra filed a proposal with the Securities and Exchange Commission to extend the remote-inspection rule again until the end of the year.

“The proposed additional six-month extension … is necessary to address the operational challenges resulting from the COVID-19 pandemic that many member firms continue to face in planning for and timely conducting, during the second half of calendar year 2022, the on-site inspection component of [supervisory rules] at locations requiring inspection in calendar year 2022,” the proposal states.

The SEC must approve Finra rule proposals. But Finra filed the proposal for “immediate effectiveness,” which means it will become operative on July 1 unless the SEC objects.

The brokerage industry, which mostly has been operating remotely during the pandemic, has embraced remote office inspections and has been pushing Finra to extend them.

In a Dec. 7 briefing, the Securities Industry and Financial Markets Association indicated it wants to make remote inspections permanent because brokerages are operating at least partially on remote basis for the foreseeable future.

“We are in discussions with Finra, the SEC and the state regulators about moving beyond the temporary relief to what should the regime look like in a permanent remote working environment,” SIFMA Chief Executive Kenneth Bentsen Jr. said at the December event. 

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.