FINRA Tells Firms to Document Reliance on COVID-19 Relief
Commentary by Steven Lofchie
In a newly issued FAQ, FINRA directed firms to document any reliance on temporary relief from regulatory obligations during the COVID-19 pandemic, including for situations in which firms do not follow their ordinary written procedures. Additionally, FINRA cautioned that it may direct firms to publicly disclose their reliance on any temporary relief.
Commentary
One of the most practical pieces of advice for any firm is that its compliance procedures should not go beyond the letter of the law requirements unless its actual practices in fact go equally beyond the letter of the law. According to FINRA, this advice holds even during the pandemic; firms should document the instances where their procedures do not account for grants of regulatory relief. Firms should take this documentation effort seriously and clean up any instances where, whether due to the pandemic or otherwise, its compliance procedures go beyond the law and are inconsistent with its actual practices.