Create Evidence of Supervision
Some of the best practices employed by compliance professionals who avoid failure to supervise allegations, is to consistently document their supervisory efforts. These professionals will have a system of documenting, (and retrieving), meeting notes, conversations, red flags, investigations, and follow-up activities. All in an effort to provide verification of how they satisfied the supervisory requirements delegated to them.
One common method of creating evidence of Supervision, is in a firm’s surveillance program. By utilizing exception reports, a supervising principal can use these reports to create evidence of supervision. This month’s newsletter is an excerpt from our Firm Element CE course, Supervision & Surveillance, which provides a review of the most common types of exceptions reports, along with what these reports could indicate.
About the Course
Supervision & Surveillance covers FINRA Rule 3110, Supervision (effective December 2014), which applies to supervision and supervisory control systems. It discusses surveillance tools that can help a firm and its supervisory employees stay on the right side of the regulators and provide the best client experience.
The course also provides an overview of responsibilities for creating a compliance system with a risk management process that protects a firm from violations, fines, and fraud. It details ways in which policies, procedures, and reports are used to effectively supervise registered representatives and to create a culture of compliance by identifying patterns and trends that pose a risk to the firm and to clients.