FINRA has released an updated Written Supervisory Procedures Checklist to reflect new FINRA rules. The Written Supervisory Procedures Checklist (“WSP Checklist”) is an outline of selected key topics representative of the range of business activities typically proposed by applicants seeking approval to become FINRA members or to expand their existing securities business under NASD Membership and Registration Rules.
In addition, FINRA advised applicants that acceptance of a firm’s proposed WSPs during the application process is not a safe harbor with respect to potential supervisory deficiencies. Among other things, the nature of the business actually conducted by a firm, the manner in which the WSPs are implemented and followed, and the extent to which the firm updates and revises its procedures to reflect operating experience and change (both regulatory and operational) are important factors in determining future compliance with applicable rules.
Additionally, FINRA member firms should note that since the WSPs of member firms are a “living” document that should provide a road map for the supervisory personnel to follow, they should compare the revised WSP Checklist against their existing WSPs to determine if the WSPs have any gaps and whether the WSPs should be updated to reflect the changes to rules and regulations.