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ASA Submits Comment Letter on FINRA's Proposed Rule


WASHINGTON, D.C. – Today, the American Securities Association (ASA) sent a comment letter to the U.S. Securities Exchange Commission (SEC) in response to the Financial Industry Regulatory Authority (FINRA) filing a proposed rule change to adopt a voluntary three-year pilot program granting them the ability to conduct remote branch and non-branch office inspections.

This proposed rule change would amend FINRA Rule 3110, which expires December 31, and provide firms with the ability to assess compliance needs and risk for individual locations and forego on-site inspections if necessary.

“The modern workplace looks a lot different than it did a decade ago, and we support FINRA’s efforts to modernize its rules to reflect the evolution of the hybrid work model,” ASA CEO Chris Iacovella said. “But we do have some concerns that certain aspects of FINRA’s residential supervisory location proposal will interact with this rule to capture a very large volume of the home offices—and firms may not have the capacity to conduct that volume of inspections every three years. To avoid this, FINRA should synchronize the timing of their proposals so the pilot program would extend to residential supervisory locations.”

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