Internal Inspections
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
- • Supervision of supervisory personnel
- • Transmittal of funds or securities from customers to third-party accounts or outside entities (such as banks o
