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Broker Dealer Rule 3120 Annual Reviews

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.

Investment Adviser Rule 206(4)-7 Annual Reviews

SEC Rule 206(4)-7 requires advisers to conduct an Annual Review to determine whether the firm’s policies & procedures are reasonably designed and implemented to prevent violation of federal securities laws (adequacy testing) and are effectively operating to prevent compliance problems, identify problems that occur and promptly correct those issues – achieving the goals as intended (effectiveness testing).