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ASA Sends Letter to SEC on FINRA's Proposed Changes to Remote Inspections Pilot and RSL Proposals

On May 25, 2023, the American Securities Association (ASA) submitted comments to the SEC in response to FINRA's proposed changes to its Remote Inspections Pilot Program and Residential Supervisory Location proposals under FINRA Rule 3110.

“The ASA largely supports and appreciates FINRA’s ongoing efforts to modernize its rule set and adapt to the evolution of workplace practices,” ASA President & CEO Chris Iacovella said. “We also stress the need for continued dialogue between FINRA and the SEC and those entities who they regulate to ensure the appropriate balance between regulatory oversight and an evolving market is achieved. Too often, certain voices with no practical knowledge of how our businesses work send in hyperbolic letters about the alleged weakening of investor protection without citing any evidence that such protections have been eroded.”

On the Residential Supervisory Location Proposal, Iacovella said, “The ASA believes the RSL strikes the right balance by allowing firms to continue to hire the most qualified candidates, regardless of their location, and to retain existing employees who are forced to relocate due to a variety of reasons.” That said, there is room for improvement, “The proposal does not consider differences between a true home office and someone who has been provided permission to work from home a few days a week from their secure laptop. Unless inspections of home offices are limited to instances where there is cause, the number of homes that need to be audited will significantly increase resulting in a time-consuming and costly process for firms with little benefit to markets and investors.”

ASA has been very active on this issue submitting a letter in September 2022 and meeting with regulators to discuss the matter.


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