Series 82: 2.1.4.9. Member Supervisory Controls

2.1.4.9. Member Supervisory Controls

It is not enough to establish and document a supervisory system. The procedures within the system must also be enforced. FINRA requires each member to establish a system of supervisory controls to ensure that a supervisory system is functioning as it should.

Example: Wallace, a branch supervisor, is supposed to review his reps’ trades using a computer-generated report. He knows his reps never do anything wrong, so he just clicks “approve” on all the records he is supposed to review, without actually looking at them.

A compliance officer informs Wallace