By Peggy E. Chait
2020 is a year that most of us would like to forget for a myriad of reasons, the foremost being the COVID-19 pandemic. It has wreaked havoc on our nation, our citizens, livelihoods, and the faith we have in each other and our country. It has had far reaching implications in our Wall Street community. Many issues that affect the way we conduct our business have been addressed by the regulatory community. Here are a few that we had touched upon in our Comment Letter which was submitted to FINRA on February 16, 2021.
> Broker/Dealers can function effectively even when their employees are not physically located under one roof, in one state or perhaps one country. Connectivity and communication have been the key to their success, in conjunction with good management and supervision. The virtual world allowed the industry to succeed virtually through emails, cell phones, home phones, quotations systems, Zoom and TEAMS meetings. In working remotely, not only have we protected the safety of our Associated Persons, but both Broker/Dealers and regulators have demonstrated that Wall Street is more than its geographic locale. Most firms were able to continue with few if any major issues noted that had impeded their business. FINRA discovered that it can perform examinations remotely and that firms can respond to information requests without ever having to put on formal attire. Although the dry-cleaning business has suffered as a result, the sweat pants industry has blossomed like never before, reinforcing the old adage, “clothes don’t make the man (woman)”. It is not far-fetched to believe that even when it is deemed safe to go back to an office setting, many firms will choose to continue to operate remotely, and as it has been proven, can do so compliantly.
> Business Continuity Plans had life breathed into them and were tested through reality. Truth be told, firms did not need to read their BCP to recognize that the protection of their Associated Persons came first and that working remotely would most likely be required. Most Private Placement and M&A firms were able to transition easily, while trading firms may have relied more heavily on their BCPs to maintain a seamless transition to the working arrangements. Nonetheless, although FINRA’s approach to many regulations are “one size fits all”, rather than tailored specifically to a Broker/Dealer’s business, perhaps each firm can use the lessons gained from their own experiences as a blueprint for their future, and FINRA should judge the effectiveness of each BCP and its surveillance of the BCP only through the eyes of the firm.
What has the pandemic taught us? Wall Street is resilient, flexible and has successfully adapted to a business model conducted virtually. Bravo to us! Now FINRA and the SEC can treat us as grown-ups! Accordingly, we hope to see changes in regulatory rules and protocols shortly.
We at Integrated Solutions℠ are here to help you navigate the ever more complex regulatory world. We offer compliance consulting and financial accounting services that are executed through a team of highly trained professionals with a plethora of backgrounds and experience. Whether there’s a need for assistance with interpreting rules and regulations, materiality consultations, financial and net capital related issues, filing requirements or new or continuing Membership Applications, we are always available to lend our expertise and help facilitate projects expeditiously and professionally. Please reach out to us if we can be of service to you.
