FINRA Rule 3110(b)(6): Documentation and Supervision of Supervisory Personnel

FINRA Rule 3110(b)(6) eliminates NASD Rule 3012's provisions regarding supervision of a prdoucing manager's customer account activity and heightened supervision. The Rule replaces these procedures with requiring a firm to have procedures prohibiting its supervisory personnel from:
(1) Supervising their own activities; and
(2) Reporting to, or having their compensation or continued employment determined by, a person the supervisor is supervising.

Additionally, FINRA Rule 3110(b)(6) provides an exception to the above "for a firm that determines, with respect to, with respect to any of its supervisory personnel, that compliance with either of the prohibitions outlined above is not possible because of the firm's size or a supervisory personnel's position within the firm." Firms relying on this exception must retain documentation of the factors the firm used to reach its determination that it fell under the exception. Firms are not required to notify FINRA that it is relying on this exception.

Link to Rule: http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=11345
Helpful Link: http://finra.complinet.com/en/display/display.html?rbid=2403&element_id=11470