July 25, 2013
I have concerns with some of the provisions of the proposed rule change filed by FINRA regarding supervision and supervisory controls.
The requirement of having another "senior" principal visit one man principally manned offices is redundent and imposes a significant burden on firms. Most independent firms have audit staffs that visit these branches and also have developed very effective electronic means of overseeing activities. There is no need to require auditors to be "senior registered principals" in order to effectively supervise. further from history I know that if we are dealing with a dishonest person or someone doing outside business these visits and audits rarely discover it. It is only through customer complaints or questions that such things are discovered and these are usually captured through electronic oversight of communications.
I am not sure why firms that may not have practices that make internal communications subject to supervisory review should have to review internal communications.
I think the amount of effort to perhaps find insider trading violations may not be worth the extra cost and this portion should be re-evaluated.
I know that the SEC has made a point of trying to determine the cost benefit ratio of additional regulation. I don`t see where this has undergone such scrutiny and would hope that FINRA would be required to complete such a study.
I appreciate the opportunity to offer these observations.
Mr Steve Putnam
Raymond James Financial Services