FINRA Flips To Focus On Flex

It’s been 3 years since our world got turned upside down and stay-at-home orders were issued all around the country. While most of the U.S. has returned to business as usual, the pandemic demonstrated just how productive people can be while working from just about anywhere. 

As a result, more and more workers are looking for more flexibility from their firms in the way of either a hybrid work environment or working fully remotely. With the pandemic forcing people to set up home offices, many have found the space and technology to have a fully robust setup. 

With the uptick in home offices, the Financial Industry Regulatory Authority (FINRA) has had to generate a remote work rule proposal for broker-dealers. Just days before a rule was set to be up for final approval, FINRA retracted it in order to make further revisions after receiving pushback throughout the industry. 

The revision to the proposal aims to make it easier for firms to supervise brokers working remotely. Under the rule, brokers’ home offices would be classified as “remote supervisory locations”, which would require an examination every three years as opposed to annually, and firms will be required to provide a current list of remote locations quarterly. However, amid feedback that the rule might be too lax, FINRA would tighten restrictions on which firms would qualify for this rule and add in a clause that books and records should not be kept physically or electronically at a broker’s house/remote location. 

Firms that have been suspended or those that have been FINRA members for less than 12 months would not be able to qualify for the extended timetable for required inspections. Also, ineligible would be registered reps that have been the subject of an investigation. 

While the rule may not cover all problem areas, FINRA has expressed its intent to create rules that allow for permanent flexibility and add diversity to its workforce. 


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