FINRA Rules on Supervision & Supervisory Control Systems

SIFMA provides comments to the Securities and Exchange Commission (SEC) on proposed consolidated Financial Industry Regulatory Authority (FINRA) rules governing supervision and supervisory controls. Specifically, FINRA is proposing to adopt new FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) for the new FINRA consolidated rulebook, based in part on existing National Association of Securities Dealers, Inc. (NASD) Rules 3010 and 3012, and New York Stock Exchange (NYSE) Rule 342.

SIFMA firmly believes that implementing such methodologies fosters effective supervision and enables all FINRA members, regardless of their size or the nature of their businesses, to reasonably design a supervisory system that is tailored to each member’s needs.  SIFMA offers additional comments on certain aspects of the proposal, including potential concerns around interpretation, as well as a broader jurisdictional concern related to certain aspects of the rule proposal and its supplementary material.