Series 7: 13.3.4 Internal Inspections And Compliance

13.3.4  Internal Inspections and Compliance

Registered principals must conduct annual internal inspections at every OSJ and every branch office that supervises a non-branch office to ensure compliance with securities laws. Other branch offices must be inspected every three years. Inspections must include a review of customer account records to detect irregularities or abuses. They must also test and verify the member’s policies and procedures with regard to safeguarding customer funds and securities, maintaining books and records, and the transmittal of funds with customers. Each