It’s hard to believe we’re starting off another year where the effects of the Covid-19 pandemic show no sign of easing up. Alas, FINRA has addressed this reality by proposing a rule change that would allow brokerages to conduct remote inspections of branch offices through December 31, 2022. This new proposal requests to add an additional six-month extension to one implemented last fall, which currently allows remote inspections through June 30, 2022.
In its proposal, FINRA states that an extension is necessary in order to address the operational challenges resulting from the pandemic. Planning and executing a remote inspection takes time, and the additional six months intends to help member firms meet this obligation. The driving force behind the extension request comes from member firms who have embraced remote office inspections over the past two years.
Taking this a step further, some industry leaders believe that regulators should allow financial firms to make remote work a permanent part of their operations. Specifically, SIFMA, the leading trade association for broker-dealers, expressed its belief in remote inspections at its recent year-end review briefing.
During this time, Kenneth E. Bentsen Jr., chief executive of the Securities Industry and Financial Markets Association, stated, “We are in discussions with FINRA, the SEC and the state regulators about moving beyond the temporary relief to what should the regime look like in a permanent remote working environment. Firms tells us there will be some positions that will be either a hybrid arrangement or a permanent remote arrangement. How do we develop the systems to make sure examinations can be conducted in that environment?”
With nearly two years of remote work under their belts, member firms have expressed that they are ready to take on the responsibility of operating in a fully remote capacity.
