Finding a Firm to Deal with the Complexities of FINRA Rule 3310
Ever since FINRA Rule 3310 was implemented securities firms have been required to crack down on any attempts at money laundering. FINRA, the Financial Industry Regulatory Authority, tailored FINRA Rule 3310 to be in accordance with the Bank Secrecy Act (31 USC 5311, et seq), and with the requirements of the Securities and Exchange Commission (SEC) to put into operation an anti-money laundering program. Looking at all of these rules and regulations, they present a firm with a difficult and time-consuming challenge. Also, not only must firms take steps to check for money laundering, but they have to report on these efforts on an annual basis. This takes still more time, and why a consultant is best for dealing with FINRA Rule 3310.
The Annual Testing Process
Under section C of FINRA Rule 3310, securities firms must perform testing every calendar year to insure that its anti-money laundering program is functioning properly. This means delegating a staff member (or members) to carry out this testing every year, and that same section C of FINRA Rule 3310 has some very specific requirements. The person(s) doing the testing has to comply with the following stipulations:
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They have to know all of the Bank Secrecy Act sections that govern the testing of the company’s procedures.
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The person(s) can’t be one of the people who carries out any of the functions in the firm that are going to be tested.
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The tester also can’t be a person whose job it is to insure that the company follows all of the stipulations of FINRA Rule 3310.
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Finally, they can not be a subordinate to either of the above-referenced positions in the firm.
Finding the right Person for the Job
From all of the aspects of FINRA Rule 3310, it’s clear that following it, documenting a firm’s efforts, testing the process regularly, and doing all of the reporting is not an easy matter. This is why going to an outside consultant, especially for the testing, is advisable. Now, FINRA Rule 3310 does allow employee who reports to someone in one of the above-referenced position to perform the test. But, it’s not easy; they have to adhere to the following:
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The firm must lack a qualified individual to carry out the testing.
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The company has to have an official policy to prevent any sort of retaliation against the tester by their supervisor.
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Once the tester has finished the task, a written report is to be given to someone who supervises the above-referenced people.
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If the firm has to use such an individual in order to comply with FINRA Rule 3310, it has to document it. Also, if the testing yields results inconsistent with FINRA Rule 3310), then the firm has to write a report explaining why.
Compliance with FINRA Rule 3310
So, for some firms, following all of the requirements of FINRA Rule 3310 can be difficult, time-consuming and costly. Faced with all of these issues, a consultant to help your firm is a good idea. For more information about complying with FINRA Rule 3310, please fill in the contact form on this page and a professional will be in contact with you for your complimentary consultation.
