FINRA Remote Inspections Pilot Program Proposal
Summary
SIFMA provided comments to the U.S. Securities and Exchange Commission (SEC) on to the Financial Industry Regulatory Authority Inc.’s (FINRA) File No. SR-FINRA-2022-021: Proposed Rule Change to Adopt Supplementary Material .18 (Remote Inspections Pilot Program) under FINRA Rule 3110.
Excerpt
September 06, 2022
VIA ELECTRONIC MAIL (rule-comments@sec.gov)
Vanessa A. Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Proposed Rule Change to Adopt Supplementary Material .18 (Remote Inspections Pilot Program) under FINRA Rule 3110 (Supervision); File No. SR-FINRA-2022-021; Release No. 34-95452
Dear Ms. Countryman:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates this opportunity to provide the Securities and Exchange Commission (the “Commission” or “SEC”) with comments in response to the Financial Industry Regulatory Authority Inc.’s (“FINRA”) File No. SR-FINRA-2022-021: Proposed Rule Change to Adopt Supplementary Material .18 (Remote Inspections Pilot Program) under FINRA Rule 3110 (Supervision) (the “Proposal”).2
SIFMA and its members would like to thank the SEC, FINRA, and their staff for their extraordinary efforts during the COVID-19 pandemic. The SEC and FINRA have been outstanding partners in coordinating with the industry and responding to the various challenges presented by COVID-19. As we continue to navigate these uncertain times, we anticipate our engagement with the SEC and FINRA will continue to be collaborative as we determine how to regulate in a post-COVID-19 world.
SIFMA appreciates the significant effort that FINRA and its staff have invested in the Proposal, which reflects meaningful input from fellow regulators and the industry over the past two years. SIFMA supports the Proposal and commends FINRA for continuing to revisit the necessity of on-site inspections and building on the temporary off-site inspection procedures that have been operational since November 2020 under FINRA Rule 3110.17. FINRA, with the input of its Board3 and advisory committees,4 proposed a well-designed pilot to gather data to assess the viability of a proposed rule change. It would be in the interest of all parties for the Proposal to be swiftly adopted. FINRA could begin collecting and assessing mandatorily required data sooner, and firms would have greater regulatory certainty for their inspection programs and workforce in a post-pandemic era.
1 SIFMA is the leading trade association for broker-dealers, investment banks, and asset managers operating in the United States and global capital markets. On behalf of our industry’s nearly one million employees, we advocate for legislation, regulation, and business policy affecting retail and institutional investors, equity and fixed income markets, and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (“GFMA”).
2 FINRA, Proposed Rule Change to Adopt Supplementary Material. 18 (Remote Inspections Pilot Program) under FINRA Rule 3110 (Supervision), File No. SR-FINRA-2022-021, 87 Fed. Reg. 50144 (Aug. 15, 2022), https://www.finra.org/rules-guidance/rule-filings/sr-finra-2022-021.