FINRA Alert Regarding Form BR for Residential Supervisory Locations

On June 18, 2024, FINRA published an alert instructing firms not to close or withdraw their Form BRs for any jurisdiction or with any self-regulatory organization (SRO) that has branch office registration or notice filing requirements. This would apply to offices or locations that will be or have been designated as Residential Supervisory Locations (RSLs).

The RSL designation became effective June 1, 2024, and allows firms to treat a private residence from which an associated person engages in specified supervisory activities, subject to certain safeguards and limitations, as a non-branch location. Consequently, the RSL designation does not require a Form BR (Uniform Branch Office Registration Form) to be filed since the location is considered a non-branch location.

In previous guidance, FINRA advised that any location that was previously registered via a Form BR and will be categorized as a RSL going forward, will require a Form BR amendment to close or withdraw from the registered location.

Within the June 18, 2024, alert, FINRA explained that certain jurisdictions and SROs that require a branch office to be “registered” or “notice filed” using Form BR may be unable to recognize RSLs. To identify RSL locations, FINRA is developing an RSL indicator checkbox on the Form U4, however, as of the date of this alert, the implementation of the “RSL checkbox” is still in progress.

FINRA also noted that the Form BR typically does not allow firms to select or deselect individual jurisdictions, FINRA, or other SROs. FINRA is working with the different jurisdictions and other SROs to add this capability within its Gateway. This would not influence an office and/or location’s registration status with other jurisdictions or SROs.

Our guidance

Until FINRA releases further notice or instruction, firms should not close or withdraw any existing Form BRs for locations that are or will be designated as an RSL. Please note that, if a location remains reported as a FINRA registered branch office on a Form BR, is listed as an RSL in a firm’s internal records, and the firm in compliance with FINRA Rule 3110.19, FINRA will recognize the firm’s designation of such location as an RSL non-branch location, and not as a FINRA registered branch office.

As of June 1, 2024, FINRA updated its FAQs to note that it has been working to amend Form U4 to add an “RSL Checkbox” that allows firms to adhere to FINRA Rule 3110.19(d) requirements. Until then, firms should maintain an internal list of all RSL locations.

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