Brokerages want speedy SEC review of Finra remote supervision proposals

investmentnews.com:

Brokerage firms want the SEC to speed up its review of Finra proposals that would allow them to permanently conduct remote supervision of their registered representatives.

Earlier this week, the Securities and Exchange Commission published a request for comment in the Federal Register on the proposal by the Financial Industry Regulatory Authority Inc. to allow a broker working remotely to supervise other brokers without the broker’s home being designated as a branch office. The deadline for public input is Aug. 1, with a follow-up deadline of Aug. 15 for rebuttal comments.

Finra also has filed a proposal with the SEC that would establish a three-year pilot program for remote office inspections. The SEC must approve Finra proposals before they are finalized.

Following the advent of the coronavirus pandemic in early 2020, Finra approved a temporary rule that allowed remote inspections because the brokerage industry essentially moved to a work-from-home model during the outbreak. That relief from onsite office inspections runs out at the end of this year.

Under current rules, offices of supervisory jurisdiction and supervisory branch offices must be inspected in person at least annually, while nonsupervisory branches are inspected every three years.

Brokerage firms are hoping that the Finra proposals get an SEC imprimatur quickly so that they have some certainty about remote inspections.

“The SEC needs to act on these proposals sooner rather than later,” said Bernard Canepa, managing director and associate general counsel at the Securities Industry and Financial Markets Association. “It will provide the industry regulatory certainty for their work arrangements and give firms enough time to operationalize before the current