Presented by the Securities and Investments Litigation Practice Group

FINRA’s Thoughts and Guidance on Working Remotely and Supervision of FINRA Licensed Registered Representatives Working Remotely

With the COVID-19 impacting many aspects of our American way of life for the past several months, many financial institutions, like many businesses, have been forced to shut down their traditional offices and locations in exchange for “working remotely.” Such significant changes, in such a short period of time, have the potential to lead to massive confusion regarding what is permitted regarding FINRA licensed registered representatives as well as FINRA licensed supervision of work from home or remote facilities.

The current pandemic has impacted pretty much every FINRA member investment firm, requiring member firms to transition most, if not all, of their staff to remote work locations and requiring many member firms to scramble to put in place supervisory practices for the new remote location circumstances.

Many wirehouses and regional firms traditionally work out of branch office locations. Many such firms have announced that they will not be coming back into the traditional office space until possibly the fall of 2020. The chain of events caused by the pandemic can be problematic for registered representatives, investment advisors, broker/dealers and RIAs from several perspectives. The lasting impact and ramifications of this current pandemic could be broad and have significant impact, not just on the economy and the stock market, but also on workplace philosophy and remote work protocols.

Although it may have gone unnoticed, FINRA actually issued a Special Alert Regulatory Notice, NTM 20-16, dated May 28, 2020. This Regulatory Notice can be found on FINRA’s website and is captioned “Transition to Remote Work and Remote Supervision.” In this notice to members, FINRA provides observations and best practices for small, medium and large firms as they transition to working remotely as well as, equally, if not more importantly, providing supervision during this ongoing remote work environment.

I urge those who are licensed FINRA registered representatives (as well as compliance supervisors and managers) to take the time to read FINRA Regulatory Notice to Member, NTM 20-16 as it provides FINRA staff observations and thoughts as to the transition of associated persons and supervisory procedures as professionals continue in this new, at least for some, remote work environment.

As the reader may be aware, FINRA is of the belief that member firms must continue to implement a “reasonably designed comprehensive supervisory system designed to the specific firm’s size and business model.” In other words, one size (probably) won’t fit all. In making changes arising out of this transition, firms are reminded that they must set forth, in writing, any changes or revisions made to their procedures and firm policies relative to the current pandemic.


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