FINRA recently re-proposed amendments to its supervision rule that would enable firms to treat a private residence as a non-branch location even if specified supervisory activities are conducted there. Dubbed by FINRA as a Residential Supervisory Location or RSL, the permissible supervisory activity largely tracks that which is specified in the OSJ definition in FINRA Rule 3110(f) (including related to order execution and approval of retail communications). Today, this location would be an OSJ.

As proposed, RSL activity must, for the most part, fit within the existing Rule 3110 guardrails for private residence non-branch office locations. For example, no customer funds or securities could be handled at the location and no customer meetings or sales activity could take place at the location. RSJs would also be subject to periodic inspections, which would be presumed to be at least every three years, rather than an annual inspection requirement for OSJs and other supervisory branch offices.

The re-proposal makes several adjustments in response to prior industry concerns, including:

• Prohibiting records from being physically or electronically maintained and preserved at the RSL
• Expanding the ineligibility criteria to include suspended firms, firms that have been a FINRA member for less than 12 months, and residences of associated persons subject to an investigation or other action relating to a failure to supervise
• Requiring firms to provide FINRA with quarterly lists of...

Read Full Story: https://news.google.com/rss/articles/CBMiU2h0dHBzOi8vd3d3Lmdvb2R3aW5sYXcuY29t...