The supervisory control system must:
- test and verify that the supervisory procedures are reasonably designed to achieve compliance with applicable laws and regulations
- create or amend supervisory procedures where a need for change is uncovered by testing
- require the submission of an annual report:
- detailing the system of supervisory controls in place
- including the summary of test results
- identifying significant identified exceptions in those results
- highlighting additional or amended supervisory procedures created in response to the results
For firms reporting $200m or more in gross revenues in calendar year (n) a report in calendar year (n+1) must be submitted to senior management, which must include, for year (n):
- a tabulation of reports pertaining to customer complaints and internal investigations made to FINRA
- a discussion of the compliance efforts including procedures and educational programs in:
- trading and market activities
- investment banking activities
- antifraud and sales practices
- finance and operations
- supervision
- anti-money laundering
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