Series 28: Internal Inspections

Internal Inspections

Registered principals must conduct annual internal inspections at every OSJ and every branch office that supervises a non-branch location to ensure compliance with securities laws. Other branch offices must be inspected every three years. Inspections must include a review of customer account records to detect irregularities or abuses. They must also test and verify the member’s policies and procedures with regard to:

• • Safeguarding customer funds and securities
• • Maintaining books and records
• • Supervising supervisory personnel
• • Transmitting funds or securities from customers to third-party accounts or outside entities