FINRA Lawyer Blog
On March 17, 2022, FINRA released Regulatory Notice 22-10.
The regulatory guidance discusses the application of FINRA Rule 3110 – Supervision — as it relates to Chief Compliance Officers (“CCOs”). The notice begins by making it clear that, as a general matter, supervision is the responsibility of the senior business management and compliance personnel serve in an advisory role rather than supervisory. FINRA notes however, that it will bring enforcement actions against CCOs in circumstances when a firm has expressly or impliedly designated its CCO as having supervisory responsibility.
FINRA explains that a CCO may have supervisory responsibility in a number of ways. For example, the CCO may have dual roles as both CCO and business management. The CCO as management would have a responsibility to supervise or delegate such supervision under Rule 3110. A firm may also designate its CCO as a supervisor as part of its written supervisory procedures. A firm’s president or CEO could also “expressly or impliedly” designate the CCO as a supervisor over a particular issue on an ad hoc basis or for exigent circumstances.