SIE practice questionmediumSupervisory Procedures
Under FINRA rules, each member firm is required to establish and maintain a system of supervisory procedures. Which of the following is a key requirement?
- AThe firm must designate a chief compliance officer and implement written supervisory procedures (WSPs)✓ Correct answer
- BSupervisory procedures are only required for firms with more than 50 employees
- CEach office must have at least five registered representatives before a supervisor is required
- DSupervisory reviews are required annually but not on a day-to-day basis
Explanation
Why A — The firm must designate a chief compliance officer and implement written supervisory procedures (WSPs)
FINRA Rule 3110 requires every member firm, regardless of size, to establish and maintain a system to supervise the activities of each associated person. This includes designating a chief compliance officer (CCO), maintaining written supervisory procedures (WSPs), assigning supervisory responsibilities, and conducting regular reviews. Supervision must be ongoing, not just annual, and applies to firms of all sizes.
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