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FINRA Taping Rule (FINRA Rule 3170)

FINRA Rule 3170 (Tape Recording of Registered Persons by Certain Firms)—commonly referred to as the “Taping Rule”— requires certain firms to install taping systems to record all telephone conversations between their registered persons and existing and potential customers, review those recordings and file reports with FINRA.

The Taping Rule is designed to prevent fraudulent and improper practices in the sale or marketing of financial products and behavior that may otherwise cause customer harm. As such, the rule applies to member firms with a significant number of registered persons that previously worked for firms that have been expelled from FINRA membership or have had their registrations revoked for inappropriate sales practices. Firms that become subject to these requirements are called “taping firms.”

Taping firms must establish, enforce and maintain special written supervisory procedures, tape record conversations for a period of three years, at a minimum, and review those recordings for compliance purposes. Taping firms must also provide quarterly reports to FINRA on the taping firm’s supervision of its registered persons’ telemarketing activities and retain the tape recordings consistent with the retention requirements in Rule 3170.  

For more information about the Taping Rule and when a firm will become a taping firm, see NASD Notices to Members 98-52, 02-61, 05-46 and FINRA Regulatory Notices 14-10 and 21-09.