SEC, FINRA Repeat Guidance On Branch Office Supervision

Thursday, December 01, 2011 07:59
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SEC, FINRA Repeat Guidance On Branch Office Supervision

Tags: compliance

Interesting timing on a joint alert from the SEC and FINRA urging broker-dealer firms to inspect their branch offices.

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Broker-dealers are already responsible for monitoring what goes on in remote locations. That's part of what makes the new guidance from the regulators so odd.

 

And raising the issue to the status of a joint alert makes the whole thing seem a lot more urgent.

 

While it's good to repeat what every compliance officer should already know, "refresher" lessons like this are usually left to the back pages of regulatory newsletters.

 

They're obviously trying to get ahead of something in the industry, but what?

 

FINRA is cracking down hard on private placement sales practices, but its due diligence probe focuses on the home offices that approve these products for the shelf. Branch staff generally don't have much input there.

 

Are the regulators seeing a wave of other unsuitable product sales? LPL was recently called out for failing to watch its solo practitioners, but the incident in question actually happened years ago.

 

Either way, the message is clear. The lone wolves need to be fenced in.

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