The Financial Industry Regulatory Authority’s board of governors has approved several rule proposals this week, including those governing remote inspections.
The board submitted “several proposals related to member firms’ supervision obligations and process-related changes in response to remote and hybrid work environments,” without offering details, to the Securities and Exchange Commission, according to a statement Finra published on Wednesday.
In November 2020, in light of operational issues resulting from the Covid-19 pandemic, Finra introduced temporary regulatory relief allowing remote inspection of broker-dealers’ offices until Dec. 31, 2021. Last September, the industry’s self-regulator filed with the SEC a proposed extension of remote inspections through the end of June this year, as reported.
Prior to the change, Finra required broker-dealers to inspect branches that don’t supervise other locations at least once every three years. Offices of supervisory jurisdiction and branches supervising other locations were required to be examined annually, as reported.
Finra faced calls from the Securities Industry and Financial Markets Association and other groups to do away with on-site inspections entirely.
Finra’s board on Wednesday also submitted proposed amendments requiring members to publish order routing reports for held orders in over-the-counter equity securities and submit them to Finra for publication on the self-regulator’s website.
In addition, the board submitted proposed amendments meant to align its rules with the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, according to the self-regulator.
The board says it will also release details at an unspecified time about how it plans to use prior-year fines.
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