Series 28: Supervising Third-Party Vendors

Supervising Third-Party Vendors

FINRA holds firms just as responsible for supervising the behavior of third-party vendors as the firm's own associated persons. This means that if a firm outsources certain business functions, they are required to make sure that the third party complies with FINRA rules. FINRA gives these examples of areas that may be outsourced to a third-party vendor: “accounting/finance (payroll, expense account reporting, etc.), legal and compliance, information technology (IT), operations functions (e.g., statement production, disaster recovery services, etc.) and administration functions (e.g., human resources, internal audits, etc.).” Third-party vendors must agree to b