Heightened Supervision Archives

While the subject matters of FINRA Rule 4111 and heightened supervision do not happen with great frequency, they are two topics that need to be discussed because when these rules do come into play, they can change a broker dealer drastically. Restricted broker dealer obligations and heightened supervision go hand in hand, and your broker dealer risk can be mitigated by creating supervision practices that include proactive reviews during the hiring process. The Financial Industry Regulatory Authority (“FINRA”) Rule 4111 – Restricted Firm Obligations – lays out a series of steps that occur when a broker dealer receives a Restricted Read more about Rule 4111 Restricted Broker-dealer Obligations and Heightened Supervision[…]

An important component of financial compliance for broker-dealers is establishing message archiving for all communications relating to its business. Not only is it required by FINRA, but it can protect your Firm if there is an employee conducting unethical or illegal business activities. In a communication from Smarsh, a participant in FINRA’s Preferred Pricing Program, they state that “Broker-dealers can avoid being penalized by regulators for wrong doing among individual professionals if they can clearly demonstrate that they are proactively and sufficiently capturing and monitoring all electronic communications.”