SALES SUPERVISION
- Firms should engage in stringent hiring procedures for registered representatives. Firms should review their practices to determine if additional protections are necessary, and should screen candidates thoroughly.
- Firms should use special supervision for registered representatives with a disciplinary history involving sales practice abuse or other customer harm.
- Firms should consider tying a component of the branch manager's compensation to his/her effective supervision of registered representatives.
- Firms must ensure that they are fulfilling their supervisory obligations under the rules of the self-regulatory organizations (SROs) and include additional communications from the SROs to outline those responsibilities.
- Firms should have in place procedures required under relevant cold-calling rules.
- Effective supervision and sound written supervisory procedures are the first line of defense in guarding against sales practices abuses for detecting those problems that do arise, and for taking prompt corrective action.
- Firms that have engaged in sales practice abuses and have been the subject of disciplinary action should take necessary steps to remedy the problems at the firm.
For more information on Best Practices, please contact Don Kittell.
(Adopted by the Board on May 22, 1996)
