Supervision of Business Conduct and Firm Operations
Communications and the compliance calendar
Rule 2210 sorts communications into correspondence (25 or fewer retail investors), retail communications (more than 25 retail investors), and institutional communications. Retail communications generally require principal pre-approval before use, and certain categories - options, mutual funds, variable products, rankings, new products - must be filed with FINRA Advertising Regulation within 10 business days of first use. Correspondence is supervised and spot-checked but not pre-approved. Trap: an email to 30 retail clients is a retail communication regardless of how informal it looks.
Books, records, and inspections
Rule 4511 and Exchange Act Rule 17a-4 govern preservation of order tickets, confirmations, complaints, correspondence, and the written supervisory procedures themselves. Rule 3110 requires a supervisory system, designation of registered principals, annual inspection of each office of supervisory jurisdiction, and inspection of branch offices on a cycle no longer than every three years. Rule 3120 requires an annual supervisory control report to senior management, and Rule 3130 requires the CEO to certify the firm's compliance processes.
Conduct limits
Rule 3220 caps gifts and gratuities at $100 per person per year. Lending arrangements with customers are restricted unless the firm permits them and the customer is a financial institution or the arrangement fits the firm's procedures. Under Rule 3310 the AML program needs a designated compliance officer, ongoing training, independent testing, and suspicious activity reports filed within 30 days of detection.
Rule of thumb
Memorize the intervals: 10 business days to file advertising, 30 days for SARs and Rule 4530 reports, annual for OSJ inspections, three years for branch offices.