The responsibilities of an OSJ, which must be managed by at least one resident general securities principal, are to: Enforce the written supervisory procedures of the firm; Periodically review customer accounts;
What is an OSJ in trading?
An Office of Supervisory Jurisdiction (OSJ) is an office identified by the broker-dealer as having supervisory responsibilities for agents and branch offices within its region. The OSJ has final approval of new accounts, and retail communication. The OSJ may also make markets or structure offerings
What are the requirements for an OSJ branch?
An OSJ branch must have at least one on-site supervisor who is a qualified and registered principal with the firm. The main office of each firm is always considered an OSJ and has supervisory jurisdiction and responsibility over all the firm's non-OSJ branch offices.
What is an office of the Secretary of State (OSJ)?
The significance of an OSJ is that the office is responsible for the activities of registered representatives and other associated persons housed not only in that office, but in other offices usually located within the same region. The responsibilities of an OSJ, which must be managed by at least one resident general securities principal, are to:
Can a single principal supervise multiple osjs?
.03 Supervision of Multiple OSJs by a Single Principal. Rule 3110 (a) (4) requires a member to designate one or more appropriately registered principals in each OSJ with the authority to carry out the supervisory responsibilities assigned to that office ("on-site principal").
What is a finra OSJ?
FINRA OSJ or Non-OSJ Branch Offices An OSJ branch must have at least one on-site supervisor who is a qualified and registered principal with the firm. The main office of each firm is always considered an OSJ and has supervisory jurisdiction and responsibility over all the firm's non-OSJ branch offices.
What is a non branch location finra?
A “non-branch location” would be any location of the member, including but not limited to a main office, that does not qualify as a supervisory branch office, a limited supervisory branch office, or a non-supervisory branch office.
What is a non OSJ?
Basically, if any sales or solicitation of securities takes place and none of the seven OSJ functions are performed at the office it is a non-OSJ branch.
How often must Non branch locations be inspected?
every three yearsFirms must inspect offices of supervisory jurisdiction (OSJs) and supervising branch offices every year, non-supervisory branch offices at least every three years, and non-branch locations on a regular periodic schedule with a presumption of least every three years.
What qualifies as a branch office?
A branch office is a location, other than the main office, where a business is conducted. Most branch offices consist of smaller divisions of different aspects of the company such as human resources, marketing, and accounting.
What is a finra branch office?
Interpretive Questions A "branch office" is generally defined as any location where one or more associated persons of a member7 regularly conducts the business of effecting any transactions in, or inducing or attempting to induce the purchase or sale of any security, or that is held out as such.
What is a branch office in insurance?
A common system for selling individual life insurance. Under this system, the soliciting agents who work out of a branch office are under contract to the insurance company, not to the branch manager. The agents receive commissions directly from the insurance company.
Do you need to register a branch?
The branch office is an independent office of a company. It requires business registration and must be entered in the commercial register. The permanent establishment is a dependent office of a company.
Why is it important to choose an OSJ group?
This is even more important when choosing an OSJ group because, in most cases, advisers work more closely with their OSJ than with their broker-dealer. Finding an OSJ group with a similar business model and culture is important.
Can advisers join OSJ?
Today we are seeing more and more advisers — often successful, established producers — join OSJ groups. In the past, only producers not meeting minimum-production levels chose this option.
What is OSJ branch?
Building a successful OSJ branch requires far more than a Series 24 license. Successful offices of supervisory jurisdiction, which supervise and provide support and services to other independents, bring real and substantial value to the table. Every week, we work with financial advisers who are ending their OSJ agreement because their OSJ offices didn’t deliver on promises or provide enough support or incentive for the percentage of payout taken.
Why is it important to look at the broker-dealer's OSJ model?
It is important to look at the broker-dealer’s OSJ model, and its restrictions and qualifications, to make sure that it will support the goals of your OSJ model. Successful OSJ branches dedicate the time and resources to bringing in advisers as well as making sure that their branch delivers what it promises.
What is the role of an OSJ supervisor?
The member must establish, maintain, and enforce written supervisory procedures regarding the supervision of all OSJs. In all cases where a member designates and assigns one on-site principal to supervise more than one OSJ, the member must document in the member's written supervisory and inspection procedures the factors used to determine why the member considers such supervisory structure to be reasonable and the determination by the member will be subject to scrutiny.
Where are supervisory procedures kept?
A copy of a member's written supervisory procedures, or the relevant portions thereof, shall be kept and maintained in each OSJ and at each location where supervisory activities are conducted on behalf of the member . Each member shall promptly amend its written supervisory procedures to reflect changes in applicable securities laws or regulations, including FINRA rules, and as changes occur in its supervisory system. Each member is responsible for promptly communicating its written supervisory procedures and amendments to all associated persons to whom such written supervisory procedures and amendments are relevant based on their activities and responsibilities.
How to File
You can electronically file Form BR via the Central Registration Depository (CRD) with a single filing, which covers all the necessary registrations. The form also allows you to amend, close or terminate a registration or withdraw a filing with the appropriate jurisdictions and SROs.
FINRA OSJ or Non-OSJ Branch Offices
Firms must indicate on Form BR whether a branch office is a FINRA Office of Supervisory Jurisdiction (OSJ) or a non-OSJ branch. The number of OSJ branches a firm must maintain depends on the nature and scope of the firm's business conducted at the branch office.
Filing a CMA When Adding a Branch Office
Adding a branch office may be considered a material change and require the filing of a Continuing Membership Application (CMA). Whether the addition would be considered material depends on how many offices the firm currently has, how many the firm has added in the past year and whether the firm is subject to a restriction.
Form BR FAQs
Q1. What information is being sought in Section 3 (Other Business Activities/ Names/Websites)? Is this the same information that is provided on the Form U4? A1.
What is OSJ in broker?
When you think about the structure of the traditional OSJ model, it’s really not much more than a cooperative, of sorts. It’s a group of advisors (or small practices) that share certain resources (at a minimum, regulatory and compliance oversight for a fee or override) and typically receive a higher payout than they would under their broker dealer's supervision.
Is the value of a group in the OSJ?
Some will argue that the value of the group lies in the relationships. It’s certainly true, but those relationships technically exist at the individual advisor level; not at the OSJ level. What’s more, if an OSJ wanted to change broker dealer platforms, each individual advisor would need to make the decision to move or not – the members of the OSJ are still individual business owners.
Can an OSJ advisor leave the OSJ?
While the affiliated advisors will always be entrepreneurs who run their own businesses, the OSJ model can (and should) be improved to one that strengthens the loyalty between the OSJ and the advisor. It's not that the advisors can't leave the OSJ, they just won't want to. When you reach this level of mutual commitment with your advisors, you set your OSJ on course to transform the way it’s viewed and valued.
Does OSJ own advisors?
But here’s the catch – the OSJ doesn’t own the underlying assets or advisors ; they can leave at any time. Which is the main reason why there is little to no value in the OSJ. The group itself is not really an advisory firm with transferable value. Yes, there is a recurring revenue stream from advisor overrides, but given the lack of asset stickiness, that can only be valued at 1x revenue, at best. These businesses simply can’t be valued using a discounted cash flow methodology (the industry standard).
