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Branch Office Regulatory Exam Program High Risk Branch Identification

Watch for it – FINRA is visiting your Branch Office ~ unannounced. Today, a routine FINRA exam includes branch office visits pre, post or during your Home Office on-site. After the lead examiner assembles the information about your firm, he/she reviews the firm’s BORAM. The FINRA Examination Team will then determine which offices pose a high risk.
There are a number of factors included in this analysis – revenue, product mix, location to supervising OSJ, branch manager, history, RR CRDs, marketing, d/b/a business name, website, Facebook, RR Google results, customer complaints, and discussions with home office staff, to name a few. A few branches may quickly come to mind for you. What do you imagine your branch manager (or a registered representative) saying to a FINRA examiner during the Branch Office visit/exam? Food for thought –
As noted in a joint SEC-FINRA release in November 2011 and FINRA NtM 11-54, branch office exams are an integral function of your firm’s compliance program. FINRA has recently included in their routine exam program time to visit selected branch offices of the Broker-Dealer. These branch office visits have uncovered numerous compliance deficiencies and have found the CCO and broker-dealer neglecting their supervisory responsibilities.
RegMaven has developed a series of programs to assist broker-dealers with this issue.

Standard Branch Office Exam –Review of firm’s supervisory program

  • Review of branch office structure• Review of Form BR and U-4 of each RR affiliated with branch office
  • On-site branch office exam (announced or unannounced)
  • branch office findings report

Branch Office Exam – with High Risk Branch Identification

  • In addition to the Standard Branch Office Exam (above):
  • Review supervisory procedures with CCO on high risk branch office(s)

Branch Office Exam – with High Risk Branch On-Site Consulting

  • In addition to the Branch Office Exam with High Risk Branch Identification (above):
  • On-site interview with high risk branch office manager (and RRs if applicable) to discuss FINRA exam process should their office be selected
  • Assist branch manager with compliance office set-up regarding firm’s procedures

We will design the program to fit your resources and branch office structure. Not all branch offices pose a risk which will be “flagged” by FINRA. RegMaven will work with your compliance staff in designing a three-year branch exam program where together we will test identified branches, on an announced and unannounced basis. Our firms will collaborate on the branch offices which may need some special attention due to the level of perceived risk and work with your examination team on the other lower risk branch offices.
Keeping you up at night? Understandable. How do you gain comfort that these “high risk” branch offices will represent your compliance program as you designed it when meeting with your regulator? First, identify the offices; second confirm that you have the right people in the right positions, and then most importantly, EDUCATE and TRAIN them. Remember, a FINRA Branch Office visit is much different than your routine Home Office exam.
Contact us today discuss your questions and concerns. Our team of former regulators, Chief Compliance Officers, securities attorneys and industry professionals are available. Visit us at or e-mail at .

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