Yet the longer social distancing continues, the narrower that window gets. Larger firms will be faced with the daunting prospect of conducting several dozen exams per month to meet regulatory requirements.

Allowing them to consolidate their 2020 and 2021 branch examinations into one exam cycle to be done after social distancing eases and before the end of next year, would give firms and advisors more time and flexibility to stay on the right side of requirements and lessen their risk of getting penalized due to factors out of their control.

One Fewer Fire To Put Out
It’s not a perfect solution, but firms are in an unprecedented predicament. During ordinary times, broker-dealers are continually planning ahead for the short-, medium and long terms. During this decidedly extraordinary time, medium- and long-term thinking have taken a backseat, while trying to adapt in the short term has come front and center.

By rolling over this year’s branch examinations into 2021 and allowing firms to consolidate 2020 and 2021 exams into one exam cycle, Finra can give firms much-needed certainty in the medium term and possibly a bit more for the long term as well.

At the very least, it will make branch examinations one less fire that needs to be put out, and in this volatile period, that can make a significant difference.

Sander J. Ressler is founder and managing director of Essential Edge Compliance Outsourcing Services LLC , a Delray Beach, Florida-based regulatory and compliance supervision consultancy.

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