Broker-Dealer Supervision

Overview

A broker-dealer must not only obey the law; it must also put into place a system of supervision to ensure and document compliance. Rule 3110(b) sets out a pretty good laundry list of the elements of a supervisory program. However, ultimately, the only rule is that there must be a supervisory process for every rule. Although every rule must be obeyed, both the SEC and FINRA regularly put out lists of their examination priorities (which can be found on the right hand side of this page). See also the topic page on Muni Supervision, which is focused on the MSRB requirements applicable to muni dealers and muni advisors. The particular requirements that apply with respect to AML are covered on the topic page focused on Anti-Money-Laundering.

As there must be a process built up around each requirement to which broker-dealers are subject, supervision is itself no different. See also the topic page on BD Supervisory Systems and Certification.

While we have included a good sampling of supervisory enforcement releases in the links on this page, they are not very informative as the current regulatory position is that a "failure to supervise" is largely a throw-in on every enforcement action, so to some extent the "failure to supervise" charge does not have any independent meaning.

Steven.Lofchie@cwt.com's picture
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Senior Attorney

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