FINRA’s Latest Fee Schedule and Form BR Filing Updates for RSLs

On July 15, 2024, FINRA published an updated SRO/Jurisdiction Registration Fee
Schedule that included a new column indicating which self-regulatory organizations (“SROs”) and jurisdictions recognized Residential Supervisor Locations (“RSLs”).

Specifically, the revised schedule includes an “Accepts RSL” column. The response options for that column comprise the following:

• Yes – The jurisdiction does not require the registration or notice filing of branch offices designated as RSLs for FINRA.
• No – The jurisdiction does require the registration or notice filing of branch offices designated as RSLs for FINRA.
• N/A – The RSL rule is not applicable and the specific state’s branch registration and/or notice filing requirements should be followed.

The RSL designation became effective on June 1, 2024. It allowed firms to treat a private residence from which an associated person engages in specified supervisory activities, subject to certain safeguards and limitations, as a nonbranch location.

The RSL designation does not require a Form BR (Uniform Branch Office Registration Form) filing with FINRA because RSLs are considered nonbranch locations.

Initial Form BR Enhancements

In previous guidance, 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. On July 18, FINRA published an alert advising firms that it made certain enhancements to the initial Form BR filings to provide an interim solution for those jurisdictions and the New York Stock Exchange (“NYSE”) that have not accepted the RSL designation. FINRA also updated its FAQs to provide details around the filing capabilities.

In its FAQs, FINRA stated that if a firm was required to register or “notice file” an RSL location with a jurisdiction or the NYSE or both, the firm could manually de-select FINRA in the Form BR and either:

• select (check) the applicable jurisdiction(s) or the NYSE, whichever does not accept the RSL designation; or
• de-select the jurisdiction that does accept the RSL designation.

FINRA also included the following chart with specific scenarios for initial RSL Form BR filings:

FINRA continues to develop functionality that will allow firms to amend Form BR to account for RSL designations and will issue further alerts and guidance as necessary.

Our guidance

Until FINRA releases further notice or instruction, firms are asked to not close or withdraw any existing Form BRs for locations that are or will be designated as RSLs, as noted in its June 18, 2024 alert. 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 is in compliance with FINRA Rule 3110.19, FINRA will recognize the firm’s designation of such location as an RSL nonbranch location and not as a FINRA-registered branch office. Please refer to ACA’s alert for details.

In its most recent alert, FINRA further noted that it continues to work 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.

How we help

Broker-dealers have several obligations for FINRA, the SEC, and other regulators. ACA Signature can help.

ACA Signature is a scalable solution curated to suit your firm’s unique compliance needs. We combine compliance advisory, innovative technology, managed services, and cybersecurity to effectively address regulatory commitments and day-to-day responsibilities.

Reach out to your ACA consultant, or contact us to find out how we can help transform your firm’s compliance program.

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