SEC Sets Comment Deadline on FINRA Amendment to Proposal on Residential Supervisory Location
The SEC set a deadline of August 15, 2023 for comments to be submitted on proposed amendments to a prior FINRA proposal to "treat a private residence at which an associated person engages in specified supervisory activities as a non-branch location." The comment deadline was published in the Federal Register.
As previously covered, the original FINRA rule proposal would make the location of a private residence subject to inspections on a regular periodic schedule. FINRA's proposal would adopt new Supplementary Material .19 ("Residential Supervisory Location") under FINRA Rule 3110 ("Supervision") to align with FINRA’s current residential exclusions. FINRA amended its rule making by:
- amending the requirement for one year of supervisory experience at the member firm to include supervisory experience at an affiliated broker-dealer or adviser;
- clarifying the scope of the ineligibility criteria for associated persons subject to an investigation or proceeding for supervisory failures; and
- requiring firms to conduct risk assessments for each office or location before allowing the location to be designated as a "Residential Supervisory Location."