FINRA Rule 3130 (formerly known as NASD Rule 3013) requires the CEO to CERTIFY that the firm has a PROCESS to adopt adequate Supervisory Policies and Procedures. The goal of the Rule is to “promote regular and meaningful interaction between senior management and compliance personnel to ensure that compliance is given the highest priority by a member’s senior executive officers.”
In order to comply with the rule, your broker-dealer must:
- Designate and identify to FINRA one or more Chief Compliance Officers (CCOs) through the FINRA Contact System on FINRA’s Web site. The designated CCOs must also be identified on Schedule A to Form BD.
- Prepare an annual report detailing the processes your broker-dealer has in place to establish, maintain, review, test and modify written compliance policies and written supervisory procedures (WSPs) reasonably designed to achieve compliance with applicable rules and laws.
- Have your Chief Executive Officer(s) certify annually that the broker-dealer has in place the processes detailed in the annual report; and that he or she has conducted one or more meetings with your CCOs in the preceding 12 months to discuss the broker-dealer’s processes and other matters set forth in Rule 3130.
- Submit the annual report to the broker-dealer’s board of directors and audit committee (or equivalent bodies) at the earlier of their next scheduled meetings or within 45 days of the date of execution of the certification.
Many FINRA members utilize outside consultants to conduct the NASD Rule 3012 review so that the executives of the broker-dealer can rely on the report of the consultant in order to make the required certification under FINRA Rule 3130. These assessments are required by Rule 3012 to be conducted every 12 months, unlike the AML Independent Test which is required to be conducted on a calendar year basis.
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