Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Adopt Supplementary Material .18 (Remote Inspections Pilot Program) Under FINRA Rule 3110 (Supervision)

On November 24, 2023, the U.S. Securities and Exchange Commission (SEC) published in the Federal Register (FR) its decision to approve proposed rule change requested by the Financial Industry Regulatory Authority (FINRA) as regards the adoption of „Supplementary Material .18 (Remote Inspections Pilot Program) under FINRA Rule 3110 (Supervision)“ as modified by Amendment No. 1. Specifically, the aim of the „Supplementary Material .18“ was/is to install a pilot program to provide member firms the option, subject to certain conditions, to complete remotely their annual inspection obligations under FINRA Rule 3110(c) (Internal Inspections) without an on-site visit to the office or location.
The adoption of the pilot program was originally proposed by FINRA in April this year (EventID #20680). However, due to concerns raised by respondents to the corresponding consultation, some of the terms of the program were subsequently altered and consulted on (EventID #22629). The SEC has now published in the FR its decision to approve the material.
As a consequence, FINRA member firms can, upon effectiveness of the rule change, perform remote office inspections provided that they adhere to stringent requirements as regard the assessment of eligibility for such remote inspections, the adoption of corresponding policies and procedures including a review of such, adequate recordkeeping of FINRA member firms, or the adoption of supervisory technology to enable firms to monitor the operations at their offices and branches effectively.