FINRA’s guide to Remote Work and Communications Supervision.

3rd June 2020 by Brielle Hewitt

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FINRA rules working from home

Here is our ‘Fingerprint’ summary of “FINRA practices in a Remote Work Environment” (with some problems, and alternatives).

Last Thursday (28th May 2020) FINRA released a Special Alert Notice for Compliance, Legal, Operations and Senior Management of FINRA Regulated Firms.  The regulatory notice covered the aspects of BCP, Supervision and Monitoring Communications with Customers from two different perspectives: “Transitioning” to and “Supervising” in a Remote Work Environment”.

“Transitioning to a Remote Working Environment”

Of the Firms FINRA surveyed, there was good practice on the logistics of premises, location, monitoring of staff, contact lists and additional staff support.    The importance of client confidentiality, avoiding fraud and Cybersecurity are all emphasised.

Included in the advice around transitioning was that firms should disseminate additional guidance and training to their staff regarding the use of firm technology, tools and services in a remote working environment.  We produced an example of such a guide when using video conferencing software.

Supervision in a Remote Work Environment“.

The topics covered include general supervision, testing, analysis of emerging risks and trading supervision. On the topics of “Communication Tools” and “Supervision of Communication with Customers”, FINRA Firms responded in a variety of ways.

Firms had probably relied on existing random sampling methods to supervise communications with customers and had to take further, manually intensive or restrictive business measures to reinforce supervision and surveillance in a remote work environment.

Despite being resource-intensive and difficult to sustain, additional manual processes such as increasing the random sampling of emails and voice communications along with additional keyword searches to attempt to identify potential communication outside of approved firm systems and tools, seem to have been the only solution for many.

Despite being of business value to the front office and sales teams, it seems firms have been forced to disable certain features and functionalities of video conferencing platforms, instant messaging such as WhatsApp and chat, that would be subject to recordkeeping obligations that the firms could not fulfil in the remote work environment.

Restrictions on the use of mobile devices, including WhatsApp communication, is an almost impossible challenge when employees are away from their desks and trading floors.  We know that separating employees from their favourite communication channels, such as WhatsApp during the workday is very unpopular and needs to be constantly policed.

Over the last six years, we have become recognised as one of the leading experts in Regulatory IT.  Fingerprint, our secure cloud platform automates the identification of suspicious messages by parsing all communications and calls across multiple communications channels (such as Bloomberg, eMail, WhatsApp, Slack and such like) and devices used both within the office and when remote working.  Fingerprint also provides an integrated monitoring, investigation and case management workflow solution.  It only takes a few working days for us to set your Firm up and running with automated supervision on multiple channels that are valuable to your front office and meets your Firm’s supervision and archiving obligations.

FINRAs original regulatory notice 2-16 published on 28th May 2020 can be found here

If we can help drive your Regulated supervision and monitoring process or assist you in understanding how best to meet the FINRA requirements, please contact me, Sean Morgan at: sean@fingerprint-supervision.com or by phone on +44(0)203 011 4145.

Sean

 


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