FINRA Alters Remote Inspection Proposal to Satisfy Critics

Posted on January 3rd, 2023 at 1:02 PM
FINRA Alters Remote Inspection Proposal to Satisfy Critics

From the Desk of Jim Eccleston at Eccleston Law.

The Financial Industry Regulatory Authority (FINRA) has amended its proposal to permit financial advisory firms to conduct their internal inspections remotely beyond year-end 2023 to satisfy state regulators and investor advocates.

FINRA’s amendments would require advisory firms to consider additional risk factors when determining whether a location is eligible for remote inspections. For instance, FINRA specifically has asked firms to evaluate a location based on its trading volume, product complexity, and whether its clients are particularly vulnerable. Furthermore, the amendments would mandate financial advisory firms to “make more frequent use of unannounced, on-site inspections” for locations where “red flags” are present or are suspected.

FINRA’s amendments also propose prohibiting remote-inspections eligibility for advisory firms that have registered with FINRA within the past 12 months, as well as for firms that are required to adhere to more stringent compliance measures than the rest of the industry based on past misconduct. Finally, FINRA added a clause to its proposed remote inspection agenda that would allow it to determine that an advisory firm cannot conduct remote inspections of location “in the public interest and for the protection of investors.”

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, advisors, law, finra

Return to Archive



Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.


March 24, 2023
Heartland Bank & Trust Co. Agrees to $9 Million Settlement For Allegedly Aiding and Abetting a Ponzi Scheme

The Securities and Exchange Commission (SEC) has agreed to a $9 million settlement
with Heartland Bank & Trust Co. over the bank’s alleged role in aiding and abetting a $75
million Ponzi scheme.

March 23, 2023
Morgan Stanley Obtains TRO Against Pennsylvania LPL Advisor Over Inherited Accounts and Misrepresentations

A federal judge has awarded Morgan Stanley a temporary restraining order (TRO)
against a Pennsylvania-based advisor who recently departed for LPL Financial.

March 22, 2023
Sanford Bernstein & Co. and Alliance Bernstein Face FINRA Arbitration Claim Over Options Advantage Strategy

Sanford Bernstein & Co. and Alliance Bernstein (Bernstein) are facing what could be the first of several Financial Industry Regulatory Authority (FINRA) arbitration claims related to its Options Advantage Strategy.