FINRA Rule 3120 testing and verification and the certification required by FINRA Rule 3130 are each required to be completed once each calendar year. FINRA members must submit a report no less than annually to the firm’s senior management containing details of its system of supervisory controls and the results of the testing and verification of those controls. Furthermore, the Rule 3130 Certification must also be completed annually but not later than the anniversary date of the previous year’s certification. New FINRA members are required to conduct the first Rule 3120 testing and Rule 3130 certification within 12 months of becoming a member.
Using a risk-based approach, Compliance Advisers conducts comprehensive reviews of client supervisory systems and procedures by testing and verifying that the firm’s supervisory procedures are reasonably designed to achieve compliance with applicable securities laws and regulations (and FINRA Rules). It also identifies exceptions and amendments to the Firm’s policies and procedures that may be identified during the testing.
Using these risk-based methodologies, gap analysis and sampling, we test and verify the effectiveness of the firm’s written supervisory policies and procedures and identify those areas that are most likely to pose the greatest risk and provides input and expertise regarding these areas. Once the testing is complete, Compliance Advisers prepares a comprehensive, consolidated report that satisfies the requirements of FINRA Rules 3120 and 3130.
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