It can be argued that there is no single compliance document more instrumental to a broker-dealer’s overall compliance program than its written supervisory procedures (or WSPs). Whether you are an existing FINRA member broker-dealer, or applying for a new broker-dealer registration, one of the most important components to an effective compliance program is the establishment of a supervisory system and written supervisory procedures.

In accordance with FINRA requirements, regardless of a firm’s size, scope or operational function, each firm must adopt and implement a supervisory system that is tailored specifically to its business and must address relevant activities of all its registered representatives and associated persons.

Once a firm has designed its supervisory system, it is important to document this system in writing and implement and enforce these written procedures for an effective compliance program. I can assist your broker-dealer in the design, drafting and implementation of this indispensable document.

It is not enough to simply prepare written supervisory procedures. I can provide ongoing updates and maintenance so the WSPs will remain relevant. The establishment of written supervisory procedures should be viewed as a dynamic document subject to change.

The procedures should be inclusive of current material changes in SEC, FINRA and/or applicable state rules and regulations based on periodic regulatory notifications, releases, regulatory alerts, rule proposals, and/or relevant industry white papers on best practices.

As part of my broker-dealer ongoing compliance support program I can monitor these material changes on a constant basis and update your broker-dealer’s WSPs accordingly. If a broker-dealer’s procedures are not maintained and updated on an ongoing basis, they often become outdated or ineffective as a result of changes in a firm’s business lines, products, practices, or new or amended securities laws.

My normal practice, which is in line with FINRA standards, is to divide each individual topic in the WSPs into two major elements. The elements are:

(1) Compliance, where a plain English iteration is supplied so you know why you doing what you’re doing; and

(2) Supervisory Procedures, which itself is divided into four sub-sections. They are:

• The “What” – the procedure itself;
• the “Who” – Who at the broker-dealer is responsible;
• The “When” – When the procedure is effected; and
• The “How Evidenced” – How the successful completion of the procedure is evidenced.

My core set of procedures provides the most broker-dealers with an effective set of compliance practices that will allow your firm to continue its work free from SEC or FINRA compliance complications.

The areas covered in the WSPs that are applicable to most broker-dealers include, but are not limited to:

• Form Filing Procedures
• General Broker-Dealer Activities
• Broker-Dealer Registered Representative Activities
• Broker-Dealer Branch Office Activities
• Supervisory Controls
• Financial Reporting/Books & Records
• FINRA Continuing Education requirements, and
• Insider Trading.

Whether your broker-dealer conducts business in the areas of Private Placements, Initial Public Offerings or Hedge Funds, I can customize WSPs to meet your specific business. I will spend the time needed to draft specific compliances procedures associated with broker-dealers that conduct any number of specific business lines.

Below is a short list of the types of additional procedures that FINRA would require to be added to a broker-dealer’s WSPs depending on the business it conducts and what type of broker-dealer it may be considered:

• Hedge Fund Procedures
• Municipal Securities Procedures
• Mutual Fund Procedures
• Options Procedures
• Private Placement Procedures
• Variable Annuity Procedures
• Underwriting Procedures

Contact me if you need simple to follow, clearly written, compliant procedures.