Member Supervisory Controls

A supervisory system lays out the procedures to enable a firm to comply with appropriate regulations. But it is not enough to simply establish and document a supervisory system; the procedures must also be enforced.

To ensure that a supervisory system is functioning as required and that written procedures are being followed, the MSRB requires that each firm set in place a system of written supervisory controls to police and enforce compliance of its own supervisory system.

One or more principals must be assigned to establish, maintain, and enforce this system of supervisory controls. The written supervisory controls should identify the principals and their areas of supervisory responsibility. This includes designating those persons responsible for the maintenance and preservation of books and records. In addition, a designated principal or compliance officer must be assigned to test and