As COVID-19 has spread across the globe, governments and businesses have implemented escalating policies designed to slow the spread of the virus. Many U.S. states, such as California, New York and Illinois, have issued stay-at-home orders, and the federal government has recommended that everyone should take steps to curtail social interactions. Consistent with these orders and guidance, many financial institutions, including broker-dealers, have temporarily closed their offices or otherwise activated remote or telework policies pursuant to their business continuity plans. In light of these operational changes and the quickly changing macro environment, firms should assess whether their supervisory policies and procedures for associated persons continue to comply with the Securities Exchange Act of 1934 (Exchange Act) and Financial Industry Regulatory Authority (FINRA) rules and are consistent with evolving regulatory guidance.
This notice provides a concise summary of a broker-dealer’s supervisory obligations and regulatory guidance regarding supervision during a pandemic. As we explain, firms should confirm that their systems of supervision appropriately take into account how the firm is conducting business while its employees work remotely.
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