The SEC and FINRA have issued a new branch inspection program that includes guidelines for firms to better supervise advisers.
Among other components of an effective supervisory system, the guidelines recommend that offices be surprise “re-audited” when routine inspections reveal a high number of deficiencies. Additionally, firms should use comprehensive checklists that use previous inspection findings and trends noted in internal reports. Finally, the regulators recommend that firms provide branch office managers with the firm’s internal inspection findings and require them to take and document corrective action.
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