Broker-Dealer Rule 3120/3130 Services

A Fresh Perspective

Broker-dealer supervisory controls are frequently listed as an important focus of FINRA’s exam priorities. The odds are strong that FINRA will be reviewing these items on your next routine cycle examination. Having an outside resource test your controls provides a fresh perspective of your controls and can identify gaps you may not be aware of.

To ensure compliance with FINRA rule 3120, Oyster will review and test your supervisory controls, procedures and document the review while also recommending ways to enhance your firm’s control environment. If you are a dual-registered firm, we can also perform your Investment Advisor Annual Review, required under SEC Rule 206(4)-7. Our experts will ensure your program is compliant, reflects your firm’s capabilities, leverages technology and has effective, streamlined processes. 

Regulatory Background

Under FINRA Rule 3120, broker-dealers are required to have in place a system of policies and procedures that annually test and verify firm supervisory controls procedures.  Firms must also create or amend Written Supervisory Procedures identified as necessary by this testing. 

The designated Principal or Principals must submit to senior management, no less than annually, a report detailing each FINRA member’s system of supervisory controls, the summary of the test results and significant identified exceptions and any additional or amended supervisory procedures created in response to the test results.