FINRA Does Everyone a Favor

FINRA has helped all those it regulates during the pandemic. It sent a regulatory notice sharing practices for transition to, and supervision of, remote work environments. This is manna from heaven for busy, stressed compliance people dealing with a number of issues of significant uncertainty. The guidance charts a course for any firm struggling with recommended practice at this tricky time. The kicker here is the risk involved with charting a different course or failing to take note and use best efforts to apply some or indeed all of the practices highlighted.

FINRA’s interactions with firms of all sizes resulted in the conclusion that those relying on web-based tools, electronic document management systems, comprehensive remote supervision capabilities, and cloud-based services faced fewer difficulties transitioning to a remote work and supervisory environment.

The advisory has some basic but perhaps easily forgotten protocols around issues like location monitoring and key contact lists for remote work. It also lays out expectations around senior management’s responsibilities and the frequency and content of their communication. It suggests the use of communication tools and enhanced monitoring to improve supervision. It concludes with commentary on email review, key word surveillance, recorded lines, and chat restrictions.

The words of advice demonstrate how proactive the regulator has been and lay down the gold standard for how regulators and regulated should interact, cooperate, and help each other in the future. The cynical might question this and call this a pipedream but it must be the ambition for the way forward.