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FINRA Revises Brokerage Firm’s Supervisory Rules

FINRA rules establish the core supervisory system procedures which all broker-dealers must follow to protect investors.  A broker-dealer or other FINRA member may be sanctioned by FINRA for violating these rules and an investor may bring a FINRA arbitration claim against a brokerage firm for failing to properly supervise a financial advisor or for failing to have in place a reasonable supervisory system in compliance with these rules.  Although the systems may be different from one brokerage firm to another, the FINRA code establishes the minimum systems which must be addressed.  FINRA Rule 3110 has been revised to address supervision requirements by all FINRA members.  These rules codify rules addressing written supervisory procedures, designation of supervisory principals and customer complaints.   The rule was published in FINRA Notice to Members 14-10 and can be viewed on FINRA’s website.

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