What is an OSJ inspection under FINRA?
Inspections Depending upon the functions performed at an office or location, it may be classified as an OSJ, supervisory branch office, non-supervisory branch office, or non-branch location under FINRA Rule 3110(c)(1), which specifies the periodicity of the attendant inspection.
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
How many OSJ branches must a firm have?
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.
What locations must be reported to the OSJ?
Firms must report any location where books and records for the registered branch office are kept, other than the address of the registered branch office, the main office or, if applicable, the OSJ designated to supervise the registered branch office.
What is the definition of an OSJ?
Definition of Office of Supervisory Jurisdiction (OSJ) 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.
What is an OSJ order?
An OSJ is any office at which one or more of the following functions take place: Order execution or market making. Formation or structuring of public offerings or private placements. Custody of customer funds or securities. Final approval by a principal of new accounts on behalf of the member.
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.
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 does WSP stand for in a broker dealer?
The Written Supervisory Procedures Checklist ("WSP Checklist") is an outline of selected key topics representative of the range of business activities typically proposed by applicants seeking approval to become FINRA members or to expand their existing securities business under NASD Membership and Registration Rules ( ...
What are broker/dealer services?
Broker-dealers fulfill several important functions in the financial industry. These include providing investment advice to customers, supplying liquidity through market-making activities, facilitating trading activities, publishing investment research, and raising capital for companies.
Who must file a Form BR?
In order to designate that individual as a Supervisor/Person-in-Charge, the firm must file a Form BR. The term “associated individual” has been added to the Explanation of Terms and the terms “person-in-charge” and “supervisor” have been clarified in the 04/2014 Form BR.
What is form Br finra?
The Form BR is the Uniform Branch Office Registration Form used for branch office registration, notice filing, closing and/or withdrawal. Broker-dealers and State-registered Investment Advisers can use this form to register or notice file their branch offices in the appropriate jurisdictions and/or with SROs.
What is a form Br?
The Uniform Branch Office Registration Form (Form BR) is the form used for branch office registration, notification, closing or withdrawal.
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.
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.
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.
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.
What are the finra rules?
FINRA Rule 2111 requires, in part, that a broker-dealer or associated person "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or ...
How do I get a CRD number?
Interested parties can also access CRD data by calling BrokerCheck toll-free at (800) 289-9999. Investors can also find such information through their state's securities regulator or via the North American Securities Administrators Association.
Who is the supervisor of 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 section 3?
Section 3 elicits investment-related business activities conducted by an associated individual at the branch office in addition to the activities conducted at the branch office by the broker-dealer or state registered investment adviser.
Where to file BR?
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.
What is FINRA 3110?
FINRA Rule 3110(a) (Supervisory System), based on NASD Rule 3010(a), requires a firm to have a supervisory system for the activities of its associated persons that is reasonably designed to achieve compliance with the applicable securities laws and regulations and FINRA rules, and sets forth the minimum requirements discussed below for a firm’s supervisory system.4
What are the new FINRA rules?
The SEC recently approved new FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) to replace NASD Rules 3010 (Supervision), 3012 (Supervisory Control System) and corresponding provisions of the NYSE Rules and Interpretations.3 In addition, new FINRA Rules 3150 (Holding of Customer Mail) and 3170 (Tape Recording of Registered Persons by Certain Firms) replace NASD Rules 3110(i) and 3010(b)(2) (often referred to as the “Taping Rule”), respectively. The new rules, discussed in detail below, become effective on December 1, 2014.
What is the FINRA Rule 3120(b)?
FINRA Rule 3120(b) requires a firm that reported $200 million or more in gross revenue (total revenue less, if applicable, commodities revenue) on its FOCUS report in the prior calendar year to include, to the extent applicable to the firm’s business, a:
What is an OSJ?
Inspections. Depending upon the functions performed at an office or location, it may be classified as an OSJ, supervisory branch office, non-supervisory branch office, or non-branch location under FINRA Rule 3110(c)(1), which specifies the periodicity of the attendant inspection.
What is FINRA 4370?
Rule 4370 also requires each firm to provide (and promptly update upon any material change) to FINRA via electronic process or other means as FINRA may specify, prescribed emergency contact information, including the designation of two emergency contact persons, both of whom must be associated persons.9Member firms may register and update their emergency contact persons through the FINRA Contact System (FCS). Visit FINRA’s FCSwebpage to access the system.
What is a BCP in FINRA?
FINRA Rule 4370 (Business Continuity Plans and Emergency Contact Information) requires a member firm to create, maintain, review at least annually and update upon any material change, a written business continuity plan (BCP) identifying procedures relating to an emergency or significant business disruption. BCPs should be reasonably designed to enable a member firm to meet its existing obligations to customers and address existing relationships with other broker-dealers and counterparties. Each member firm has flexibility to tailor its BCP to the size and needs of its business, provided that the BCP addresses the enumerated minimum elements set forth in Rule 4370 to the extent applicable and necessary to the firm’s business.8
What is a FINRA review?
FINRA periodically reviews its rule sets7to determine whether they are meeting their intended objectives by reasonably efficient means. These reviews encompass not only the substance and application of a rule or rule set, but also FINRA’s processes to administer the rules. The reviews also explore whether FINRA can provide additional resources to help member firms’ compliance efforts or otherwise further the regulatory objectives of the rules. Among other things, FINRA uses this process to determine whether there are more efficient means to achieve the regulatory objectives without diminishing investor protection.
When will the 2021 FINRA comment period be released?
FINRA encourages all interested parties to comment. Comments must be received by February 16, 2021.
What is the 20-08 notice?
Regulatory Notice 20-08(March 2020) regarding pandemic-related business continuity planning, guidance and regulatory relief to member firms from some requirements; Regulatory Notice 20-13(May 2020) reminding firms of the risks and challenges of fraud during the pandemic;
Can FINRA neutrals view case information?
Arbitration and mediation case participants and FINRA neutrals can view case information and submit documents through this Dispute Resolution Portal.
What is FINRA Rule 3110?
Rule 3110 (b) Documentation and Supervision of Supervisory Personnel. 1. When can a firm rely on FINRA Rule 3110 (b) (6) (C)’s limited exception to the prohibition of a firm’s supervisory personnel from supervising their own activities and reporting to , or having their compensation or continued employment determined by, ...
What must a firm do to demonstrate compliance with FINRA Rule 3110 (c) (2)'s requirement to?
What must a firm do to demonstrate compliance with FINRA Rule 3110 (c) (2)'s requirement to have a means or method to document customer confirmation, notification or follow-up for transmittals of funds or securities from customers to third parties, to outside entities and to locations other than the customer’s primary residence, and between customers and registered representatives?
What is the purpose of Rule 3130?
The Rule 3130 report identifies the processes a firm has in place, at the time of the CEO’s certification, to establish, maintain, review, test and modify its written compliance policies and written supervisory procedures.
Does a 3110b require a principal to be a supervisory officer?
Rule 3110 (b) (6) does not explicitly require that the person relying on the limited exception to conduct supervisory reviews of a firm’s supervisory personnel be a principal. However, Rule 3110 (b) (6) does require that the supervisory arrangement with respect to such supervisory personnel otherwise complies with Rule 3110 (a)’s requirement that the firm have a supervisory system and written supervisory procedures that are reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules. This would include a supervisory arrangement that is reasonably designed to comply with FINRA’s qualification requirements for persons acting in a supervisory capacity.
What are the activity types that firms can select for each registered branch office?
(1) include Retail and Institutional (as types of Sales Activity), Public Finance, and Other; (2) add “Trading” to the existing Market Making activity;
What happens when a supervisor is removed from a BR?
When a Supervisor/ Person-In-Charge is removed on a Form BR amendment filing, that individual will remain associated with the branch in a non-Supervisor/ Person-In-Charge role. In order to completely remove this individual from being associated with the branch, the firm must file a U4 amendment to provide an end date to the individual's Office of Employment Address location. The term “associated individual” has been added to the Explanation of Terms and the terms “person-in-charge” and “supervisor” have been clarified in the 04/2014 Form BR.
How to determine if a firm needs to register its main office?
To determine whether a firm needs to register its main office via the Form BR, firms should review the uniform branch office definition in FINRA Rule 3110 (f) (2) and Regulatory Notice 14-10 and Notices to Members 05-67 and 06-12 . Firms (and their legal counsel) are responsible for determining whether a main office meets the definition of “Branch Office” and therefore must be registered/notice filed on Form BR.
What is a BR form?
Form BR is the Uniform Branch Office Registration form that enables firms to "register" or "notice file" branch offices electronically through Web CRD ® with FINRA, the New York Stock Exchange, Inc. (NYSE) and other participating jurisdictions. Information about "registering" or "notice filing" branch offices using the Form BR is available at:
Does FINRA charge for branch office?
FINRA and jurisdiction fees for opening a branch office will be deducted from your firm’s Flex-Funding Account. Refer to the SRO/State Fee schedule for a list of applicable SRO and state/jurisdiction fees.
Is an OMSJ required for a branch office?
No. The question is optional. Under MSRB rules, certain entities may be required to identify whether a branch office is designated as an OMSJ (as such term is defined under MSRB rules). To assist those entities that use Form BR in complying with that MSRB requirement, a firm may elect to answer this question in Section 2 (Registration/Notice Filing/Type of Office/Activities) to help track their OMSJs.
Can a firm associate a person with a branch office?
No. When a firm associates an individual with a branch office on the Form U4, the individual is considered an "Associated Person" of the branch. In order to designate that individual as a Supervisor/Person-in-Charge, the firm must file a Form BR.
What is a non-OSJ branch?
This type of branch is defined in rule 3110 as “any location where one or more associated persons of a member regularly conducts the business of effecting transactions in, or inducing or attempting to induce the purchase or sale of, any security, or is held out as such…”. 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 many securities transactions can a person make in a calendar year?
Any location that is used primarily to engage in non-securities activities and from which the associated person (s) effects no more than 25 securities transactions in any one calendar year
What is a branch office?
Any location that is established solely for customer service of back office type functions where no sales activities are conducted and that is not held out to the public as a branch office
Is growth good for FINRA?
Growth is good but be mindful that FINRA is your partner and wants to help you during your transition. Any changes you will be making will be by their rules. While the office types and their basic functions were reviewed in this article there are other things that should be considered before opening a new office such as, initial and annual fees, supervision requirements, inspections, manual changes, filings, etc. Something else to question is whether FINRA would approve of the change. Before expanding ask yourself “Do I need to file a Change of Membership application or does this meet the Safe Harbor rule IM-1011-1?” FINRA will be happy to weigh in if you file a Materiality Consultation.
