Series 14: 5.1.6. Member Supervisory Controls

5.1.6. Member Supervisory Controls

It is not enough to establish and document a supervisory system that dictates procedures to monitor a firm’s compliance with regulatory rules and regulations. The procedures must also be enforced. To ensure that a supervisory system is functioning as required and that written procedures are being followed, FINRA requires that each member firm set in place a system of written supervisory controls to test and verify its own supervisory system for effectiveness and modify when necessary.

Accordingly, each member firm must identify one or more principals who shall establish, maintain, and enforce this system of supervisory controls. This designated principal or compliance officer has the responsibility to test and verify the success of the member firm’s supervis