Regulatory Update: FINRA Reminds Firms of their Supervisory Obligations Related to Outsourcing to Third-Party Vendors

Regulatory Notice 21-29

FINRA Reminds Firms of their Supervisory Obligations Related to Outsourcing to Third-Party Vendors

“Member firms are increasingly using third-party vendors to perform a wide range of core business and regulatory oversight functions. FINRA is publishing this Notice to remind member firms of their obligation to establish and maintain a supervisory system, including written supervisory procedures (WSPs), for any activities or functions performed by third-party vendors, including any sub-vendors (collectively, Vendors) that are reasonably designed to achieve compliance with applicable securities laws and regulations and with applicable FINRA rules. This Notice reiterates applicable regulatory obligations; summarizes recent trends in examination findings, observations and disciplinary actions; and provides questions member firms may consider when evaluating their systems, procedures and controls relating to Vendor management.”

Read further here:  Ref: https://www.finra.org/rules-guidance/notices/21-29