FINRA Statement to Correct Misinformation About the New Residential Supervisory Location Rule
FINRA's new rules for evolving work models — hybrid and remote —provide member firms greater flexibility for their registered persons to work from home. Our new Residential Supervisory Location (RSL) Rule and Remote Inspections Pilot Program Rule are intended to provide member firms greater flexibility — not less — to allow eligible registered persons to work from home, following the expiration of temporary COVID-19 relief from existing requirements. The new rules provide a practical and balanced way for firms to meet their regulatory obligations, while protecting investors, and acknowledging the need for greater workplace flexibility.
FINRA has seen recent statements from firms stating that new, stringent rules from FINRA will require them to bring their workforce back to the office full time. This is incorrect. FINRA notes that a location from which an associated person regularly conducts securities business on behalf of a member firm, including a home office, has always been subject to possible disclosure, registration and inspection under FINRA rules and applicable rules of other regulators. The COVID-19 pandemic prompted FINRA to provide member firms with temporary relief from many of these requirements. After a three year plus rulemaking process on our new rules, during which FINRA engaged in substantial outreach to member firms, FINRA informed member firms in January that the temporary relief would come to an end on May 30, 2024, a year after the official end of the pandemic.
FINRA had extensive conversations with various stakeholders — including member firms — and factored in comments received by those stakeholders in producing the final rules that were approved by the Securities and Exchange Commission. Member firms largely expressed strong support for these new rules.
To further assist member firms, we have provided guidance — including a Regulatory Notice, FAQs, webinars and direct communications from our staff — to enable them to use the new RSL designation and Remote Inspections Pilot Program should they wish to do so. Firms are encouraged to review these new rules and reach out to their Risk Monitoring Analysts with questions about how these rules might impact their business or workforce planning.
Resources:
- Residential Supervisory Location Rule Key Topics Page
- Frequently Asked Questions about Residential Supervisory Locations
- Remote Inspections Pilot Program Rule Key Topics Page
- Frequently Asked Questions about Remote Inspections Pilot Program
- Webinars
- FINRA recognizes that our rules need to account for evolving work models — hybrid and remote. Our new Residential Supervisory Location (RSL) Rule and Remote Inspections Pilot Program Rule are intended to provide member firms greater flexibility — not less — to allow eligible registered persons to work from home, following the expiration of temporary COVID-19 relief from existing requirements.
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