What are written supervisory procedures?
Written supervisory procedures are the documented rules describing how a firm supervises its business to comply with the regulations that apply to it. Generic WSPs that do not match the actual business are a common exam finding.
Written supervisory procedures (WSPs) are the documented policies describing how a broker-dealer supervises its business to comply with applicable securities rules: who is responsible, what they review, how often, and how exceptions are handled. FINRA requires them, and the most common problem is WSPs copied from a template that do not describe what the firm actually does.
What good WSPs contain
They have to map to the real business, not a generic one.
- The specific activities the firm conducts
- Named supervisory responsibility for each area
- The review performed, its frequency, and its evidence
- How exceptions and escalations are handled
Why generic WSPs fail
An examiner compares the WSPs to what the firm actually does. Boilerplate that describes activities the firm does not perform, or omits ones it does, is a finding waiting to happen. WSPs should be written for the firm, then followed.
Common questions
Are WSPs and a compliance manual the same thing?
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