SEC Allows Remote Inspections Through 2021

On November 18, 2020, the SEC made effective FINRA’s proposed temporary rule amendment allowing remote inspections through December 31, 2021. The SEC regulatory action adopts temporary relief (Supplementary Material .17) under FINRA Rule 3110 (Supervision) by providing member firms the option to remotely complete inspection obligations for Calendar Years 2020 and 2021. FINRA stated that the change was a response to the operational challenges presented by the COVID-19 pandemic.

The Commission reaffirmed that the “rule change would not relieve firms from meeting the core regulatory obligation to establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules that directly serve investor protection.”

About Bates Compliance:

Bates Compliance delivers guidance and tailored compliance consulting solutions to our broker-dealer, investment adviser and hybrid firm clients on an as-needed or ongoing basis. Our team—made up of experienced senior compliance, legal and former regulatory professionals—drafts and tests policies, procedures, and supervisory and compliance processes, recommending and implementing changes based on leading practices to enhance compliance and supervisory systems and to remediate regulatory, litigation and internal audit findings. Bates Compliance consultants prepare clients for branch exams and conduct mock SEC reviews.

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Contact Bates today:

David Birnbaum, Managing Director, dbirnbaum@batesgroup.com

Phone: 917-273-2682

Hank Sanchez, Managing Director, hsanchez@batesgroup.com

Phone: 504-450-9632