• Ron Kulik

The New Guidelines of Client Supervision and Communication from FINRA



Due to Covid-19 #pandemic, many businesses have totally shifted from in-person interactions to online transactions. Restaurants run their businesses online, office workers have brought their jobs at home, and sales and service people hold meetings via video conferencing calls. This gave way to the rise of Zoom as an online communication platform that teams and individuals use to communicate with their superiors and clients.


With this shift, the Financial Industry Regulatory Authority (FINRA) has released new guidelines on how to supervise registered representatives when they conduct meetings with clients via audio or video conferencing such as #Zoom or #teams meetings. Last April 16, 2020, #FINRA has updated its website containing these guidelines, and here's a breakdown of the updated regulations.


1. All registered members must be supervised by a member of the firm when conducting live audio or video conferences.


2. The supervision system must adhere to the laws, regulations, and the rules set by FINRA.


3. There's no specific way to record or document the video conferencing, but in the event that instant messaging, chat, or slide presentations are utilized during Zoom meetings, it is the responsibility of the member to keep a record of these written communications as per Securities Exchange Act Rule 17a-4.


4. All communications within the firm, regardless of the firm's industry, must employ the applicable standards like the FINRA Rule 2210. The application of these standards also has to be consistent across all communications.


5. All the recordings can be requested by regulatory bodies and has to be turned over upon valid request.


6. All new procedures that differ from the existing written supervisory procedures must be documented.


7. Firms must always consider the associated risks when sending a business correspondence to client's personal address and must report all complaints from customers.


The new changes in the lives of entrepreneurs, employees, and freelancers paved the way to new rules, system, and regulations from several regulatory bodies. Being informed is the key to stay on top of the game and to avoid problems along the way. So, keep these guidelines in mind.

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