At the beginning of the year, FINRA released important updates related to supervision requirements for broker-dealers. As broker-dealers and their employees started experiencing various work-from-home, virtual meeting, and operations challenges, FINRA provided valuable guidance for the transition in a FAQ related to the coronavirus pandemic. Below are a few items where FINRA has provided areas of relief related to AML and Branch audits.

AML Independent Testing

FINRA Rule 3310, Anti-Money Laundering (“AML”) Compliance Program, requires firms to perform independent testing of their AML program every calendar year. If a member firm neither executes transactions for customers, holds customer accounts, nor acts as an introducing broker with respect to customer accounts, then independent testing of the AML program is required every two years on a calendar-year basis. For example, this includes firms that engage solely in proprietary trading or conduct business only with other broker-dealers.

If a firm regularly conducts its independent testing during this period of the pandemic, FINRA has granted an extension. Firms are able to conduct the testing up to December 31, 2020 for the calendar year. Firms may review any AML-related updates on the FINRA FAQ Page.

Annual Branch Office Inspections

FINRA Rule 3110, Supervision, requires firms to establish and maintain a system to supervise the activities of its associated persons. This requirement includes annual inspections of every OSJ branch and any branch office that supervises at least one non-branch location on a calendar-year basis. Additionally, each member should inspect every branch office that does not supervise a non-branch location at least every three years.

FINRA recognizes that due to state-specific orders and overall health and safety mandates, the ability of supervisors to travel and perform an annual review may not be practical. Under Regulatory Notice 20-08, FINRA recommends that firms make appropriate updates and re-evaluate branch inspection schedules accordingly. Firms should consider variables such as the volume, locations, and inspection personnel when adjusting the schedule. Since the COVID-19 pandemic is an ever-evolving situation, firms should be sufficiently flexible when making updates to various programs within their compliance program. Firms should also ensure that they document any changes and the reasons for the changes. If the expected timeframe that the changes will be in effect is known, then this should be documented as well.


FINRA has made updates to the FAQ resource periodically throughout the last six months. It is important to check back often for the most up-to-date information related to AML and Branch audits.

Check out our previous blog posts related to compliance during COVID-19 to learn more about areas of relief provided by FINRA.