Written Supervisory Procedures Checklist for Broker-Dealers
The Broker-Dealer 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 FINRA Membership and Registration Rules.
As part of the new member application process, applicants are required to submit a completed WSP Checklist, together with a copy of their Written Supervisory Procedures ("WSPs"). FINRA staff reviews the checklist and the WSPs in conjunction with its determination of whether the applicant meets the standards for admission specified in FINRA Rule 1014(a).
Note that the outline of topics in the WSP Checklist is not all–inclusive and does not necessarily represent all the areas of inquiry that the staff will make when evaluating supervisory procedures proposed in an application. The full extent of the staff's inquiry and evaluation will depend on a number of factors, including the precise nature of the proposed business activities.
In addition, applicants are advised that acceptance of a firm's proposed WSPs during the application process is not a safe harbor with respect to potential supervisory deficiencies. Among other things, the nature of the business actually conducted by a firm, the manner in which the WSPs are implemented and followed, and the extent to which the firm updates and revises its procedures to reflect operating experience and change (both regulatory and operational) are important factors in determining future compliance with applicable rules. The WSPs are a "living" document and should provide a road map for the supervisory personnel to follow when they conduct each review. WSPs should not be updated only to reflect changes to rules and regulations, but also when changes are made to the supervisory process.
IMPORTANT NOTE: This outline of topics should not be considered by the user to include all topics and issues applicable to the user's business. It is merely to be used as an aid in preparing WSPs.
Certain references to specific rules and other guidance have been provided for some topics and line items contained within the checklist, although the list of references may not be exhaustive. Please review all references relevant to the firm's business plan prior to completing and submitting the checklist.
ADVISORY: Members should be aware that the requirements of FINRA Rule 3120 (Supervisory Control System) and FINRA Rule 3130 (Annual Certification of Compliance and Supervisory Processes) are separate and distinct from the requirements pursuant to FINRA Rule 3110(b) (Written Procedures) that members create and maintain WSPs.
Members seeking guidance on compliance with FINRA Rules 3110, 3120 and 3130 are encouraged to visit the Supervision web page FINRA has created to assist members in complying with these rules. The web page contains rule filings, Notices, and other publications relating to these rules. See the Supervision Topic Page.
FINRA Compliance Tools Disclaimer
This optional tool is provided to assist member firms in fulfilling their regulatory obligations. This tool is provided as a starting point, and you must tailor this tool to reflect the size and needs of your firm. Using this tool does not guarantee compliance with or create any safe harbor with respect to FINRA rules, the federal securities laws or state laws, or other applicable federal or state regulatory requirements. This tool does not create any new legal or regulatory obligations for firms or other entities.
This tool was last updated on September 19, 2022. This tool does not reflect any regulatory changes since that date. FINRA periodically reviews and update these tools. FINRA reminds member firms to stay apprised of new or amended laws, rules and regulations, and update their WSPs and compliance programs on an ongoing basis.
Member firms seeking additional guidance on certain regulatory obligations should review the relevant FINRA Topic Pages.
FINRA's Office of General Counsel (OGC) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with interpretative guidance relating to FINRA’s rules. Please see Interpreting the Rules for more information.