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FINRA COMPLIANCE

FINRA Compliance
PROVEN BY THE RECORDS YOU KEEP

The recordkeeping, supervision and cybersecurity controls your firm has to run, put in place and documented by people who do this for a living.

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THE EXPOSURE

What a Records Request Finds

FINRA is a self regulatory organization, so the pressure rarely arrives as a warning. It arrives as a request for records, and the answer is either on file or it is not. Most of what a firm gets asked for is a technology problem before it is a legal one, which is why this sits inside our wider IT compliance services.

Firms without these controls are usually carrying:

  • Records nobody can produce on request
  • Supervision with no evidence behind it
  • Client communications stored where nobody can search them
  • A cybersecurity program nobody has written down
  • No tested plan for the day the systems go down
  • Staff who have not been trained this year
  • Trade and complaint records spread across personal devices
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WHAT YOU GET

A Partner for the Technology Half

Your compliance officer owns the program. Most of what that program depends on is technology: where records live, how long they are kept, who can reach them, and whether any of it can be shown on request. That half is ours.

Controls Mapped to the Rules
Your systems lined up against the FINRA rules that govern records, supervision and continuity, so nothing rests on memory.
Evidence Ready in Advance
Retention, access logs and reporting kept current, so a request for documentation is a lookup instead of a scramble.
A Named Owner for the Work
A virtual Chief Security Officer carries your security and regulatory program, so it does not land on an office administrator.

Two neighbors worth naming rather than blurring. If a customer or a prospect has asked you for an attestation report, that is SOC 2, not FINRA. If your firm also finances or arranges credit for consumers, a separate federal rule may apply on top: see FTC Safeguards compliance.

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WHAT FINRA ASKS FOR

The Four Areas That Land on IT

FINRA compliance is wider than technology. These are the parts that run on it, with the rules ITS has already written about in public.

Rule references and the framework guidance below are quoted from ITS's published articles "Compliance in Finance: What is FINRA Compliance?" (July 2024) and "6 Benefits of Managed IT (for Your FINRA Compliance Needs)" (December 2024), which quote Sean Harris of ITS.

Recordkeeping and Retention

Transactions, communications and customer complaints have to be complete, retained and retrievable. Rule 4511 on books and records sets a retention floor of at least six years, which is a storage, search and backup question long before it is a legal one.

Read the rule breakdown

Supervision and Oversight

Rule 3110 on supervision, Rule 3120 on supervisory control systems and Rule 3130 on annual certification all expect a supervisory system you can evidence. That means monitoring that produces a record, and reports somebody can actually sign.

See the common gaps

Business Continuity

Rule 4370 on business continuity plans expects a plan for the day the systems are not there. Backup, recovery and a tested restore, not a document nobody has opened since it was written.

How continuity plans differ

Cybersecurity and Data Protection

FINRA does not name a framework to follow. ITS's own guidance is to work toward CIS Controls, NIST CSF or NIST 800-53, because meeting one of those covers what FINRA expects on cybersecurity.

What is FINRA compliance
HOW IT STARTS

Three Steps, No Obligation

The same order every time, and you can stop after any of them.

STEP 1

Review Where You Stand

A working session on your records, your supervisory system and your security controls, against the FINRA rules that apply to your firm. No preparation needed on your side.

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CLIENT RESULTS

What Clients Say About Working With Us

Two ITS clients on what changed after they handed the technology over. Neither is quoted about FINRA, and neither is presented as a member firm.

We always get a technician or an engineer that can solve the problem remotely and we have very little downtime. We’ve had a couple of times where we have had an employee that is prevented from working, and when we call in and we escalate quickly, we always have someone readily available to solve the problem.

Kathy Mickelson Office Manager, Tower Arch Capital
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FAQ

What Member Firms Ask Us First

1. What is FINRA compliance?

FINRA is the Financial Industry Regulatory Authority, a non profit self regulatory organization thatworks with the SEC to oversee securities firmsin the United States. Firms must be registered with FINRA to sell securities or give investment advice, and compliance with its rules is mandatory for member firms. As Sean Harris of ITS puts it: "It is still self-regulating; it is its own thing. Most of the time, it would require a whistleblower to bring the non-compliance to the attention of the regulator."

Quoted from "Compliance in Finance: What is FINRA Compliance?", itsasap.com, July 2024.

2. Which FINRA rules actually touch our IT?

Four groups, in practice. Rule 4511 on books and records, which sets how long you keep things and therefore where they live. Rules 3110, 3120 and 3130 on supervision, which need monitoring that produces a record. Rule 4370 on business continuity, which needs backup and a tested restore. AndRule 2090 on knowing your customer, which starts with knowing what is in your systems.

Rule references quoted from ITS's published articles "Compliance in Finance: What is FINRA Compliance?" (July 2024) and "6 Benefits of Managed IT (for Your FINRA Compliance Needs)" (December 2024).

3. Does FINRA require a specific cybersecurity framework?

No, and that is the confusing part. FINRA expects multi layered cybersecurity and publishes guidance on it, but it does not name one framework you must follow. Sean Harris of ITS is direct about how to resolve that: "If you choose and work toward a framework such as CIS controls, NIST CSF, or NIST 800-53, you will meet all the requirements that FINRA has for cybersecurity."

Quoted from "Compliance in Finance: What is FINRA Compliance?", itsasap.com, July 2024.

4. How long do we have to keep records?

Rule 4511 on books and records sets a floor of at least six years, and different record types carry their own requirements on top of that. The practical question is not the number. It is whether a six year old email thread can be found, proved unaltered, and produced in a usable format. That is a storage and search problem.

Retention floor as published in "6 Benefits of Managed IT (for Your FINRA Compliance Needs)", itsasap.com, December 2024.

5. Can we handle FINRA compliance ourselves?

Plenty of firms do. It comes down to whether you can staff it. Recordkeeping, supervisory reporting, continuity testing and security all need somebody who keeps up with them, and for a smaller firm that is a full role attached to a function you hope never gets tested. Bringing in outside help buys the expertise without the headcount, and our questions to ask an IT provider for a financial business checklist is a reasonable place to start.

6. Is ITS a compliance consultant or an IT provider?

An IT provider, and the distinction matters. ITS does not register your firm, file your reports, run your anti money laundering program or act as your Chief Compliance Officer. What we do is the technology underneath: the systems that hold the records, the controls that make supervision evidenceable, the continuity plan, and the documentation your compliance officer needs when a request arrives. We work alongside your compliance function, not instead of it.

Find Out What You Could Not Produce Today

A working session on your records, supervision and security controls, with the gaps written down and yours to keep. No obligation at the end of it.

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