Broker-Dealer Supervision: WSPs and Office Inspections
Chapters in this video
- 0:00 Reasonably designed supervisory systems and the no-perfection rule
- 1:38 Written supervisory procedures: the four required elements
- 2:42 Supervisor credentials and the self-supervision trap
- 3:15 Classifying the three office types: OSJ, branch, and non-branch
- 4:41 Inspection timelines: annual, inherited annual, and three-year cycles
- 5:58 Principal review of complaints, email, and internal communications
- 6:58 Rapid-fire exam recap
What this video covers
- Why a "reasonably designed" supervisory system does not require perfection, and why one missed violation does not automatically mean system failure
- What written supervisory procedures (WSPs) must specify: the responsible individual, the supervisory activities, the frequency, and the documentation manner
- Why WSPs must be updated promptly when business changes, and where copies must be kept
- The three office types (Office of Supervisory Jurisdiction (OSJ), branch office, non-branch location) and which activities bump a location into the OSJ tier
- How inspection timelines work: annual for OSJs, annual for any branch that supervises another location, and at least every three years for all other branches and non-branch locations
- Why a supervisor generally cannot supervise their own activities or report to someone they supervise, and the unavoidable-conflict documentation exception
- Why electronic complaints and internal communications are treated identically to paper for principal review purposes, and who retains final responsibility
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