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MDs at banks in America rail against FINRA's "dumb" plan to visit their homes

Barclays' managing directors (MDs) may not be happy with being summoned back into the office five days a week, but they will at least receive consolation from the knowledge that regulators will no longer have a reason to visit them in their homes.

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Bloomberg reported today Barclays is considering summoning US employees back to the office full-time to avoid FINRA's new "residential supervisory location" rule, which comes into effect on June 1st.  

The new rule will allow regulators to visit the homes of broker dealer employees supervising more than 10 people. Regulators will visit on a triannual basis and will look at, among things, how "books and records" are maintained, how customer "funds and securities" are safeguarded, and how people are being supervised from afar. Having paid a visit, regulators will then write reports on their findings. 

Speaking off the record, one managing director at a bank in New York says the arrangements seem crazy. "It's so dumb," he tells us. "Bureaucrats really have nothing else to do apart from creating rules that should be irrelevant." 

These new rules are, in fact, an iteration of some negated rules that existed prior to the pandemic, when home offices/bedrooms were designated "offices of supervisory jurisdiction" (OSJs) and were subject to annual inspections. In the future, designated RSLs will be visited three times less frequently. MDs still aren't happy: "Why register people's desks in their bedrooms after they spent four years working there and nothing bad happened?," reflects one. 

The RSL rules could also impact vice presidents and directors who work from home if they manage more than 10 people.  They will equally apply to anyone supervising more than 10 people, even if they only spend two days a week at home and are in the office the remainder of the time.

Faced with the hassle of a) registering all the new RSLs and b) arranging all the home inspections, it's easy to see why banks like Barclays are considering bringing everyone back to the office instead. 

Some people will be immune to the new rules. FINRA says that IT people who work from home on a regular basis and who aren't in supervisory roles can still work from home, as they would be in a "non-sales" location. Equally, operations professionals can be deemed as working at a "back office" location, and they won't need to have their home offices registered either. 

The new rules will create an incentive for senior bankers who want to work from home to stick around. Even if banks are happy to register home offices and even if bankers are happy for regulators to pay them a visit, a home office isn't eligible for the scheme unless its occupant has a year's "direct supervisory experience" with that firm or an affiliate. People who've recently been promoted or changed jobs won't be eligible.

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AUTHORSarah Butcher Global Editor
  • ev
    evian987
    23 May 2024

    well Citi just sent out the 5 day requirement for part of markets…

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