through FINRA’s voluntary, three-year remote inspection pilot program pursuant to new Rule 3110.18 as discussed more fully below. FINRA Regulatory Notice 24-02 at 5 (Jan. 23, 2024).FINRA’s Remote Inspections Pilot Rule 3110.18FINRA Rule 3110.18, which was adopted in November 2023, provides eligible firms with the option to participate in a voluntary, three-year remote inspections pilot program. This program will allow firms to fulfill their Rule 3110(c) inspection obligations through remote means for eligible OSJs, branch offices and non-branch locations, subject to specified safeguards and limitations. The rule states that “[t]he requirement to conduct inspections of offices and locations is one part of a member’s overall obligation to have an effective supervisory system and therefore the member must maintain its ongoing review of the activities and functions occurring at all offices and locations, whether or not the member conducts inspections remotely.” FINRA Rule 3110.18(a),(d); 88 FR 82464.To take advantage of the pilot, a firm must comply with the rule’s eligibility criteria, which deem certain high-risk member firms, offices, and locations as ineligible to conduct such inspections. For example, certain firms as a whole would be ineligible if they are or become subject to specified regulatory events such as being: classified as a “Restricted Firm” under FINRA Rule 4111; designated as a “Taping Firm” under FINRA Rule 3170; or suspended from FINRA membership. New firms (who have been FINRA members for less than 12 months) would also be ineligible. Certain firm offices or locations would also be unable to conduct remote inspections based on eligibility criteria. Some examples of ineligible offices or locations include those where: customer funds or securities are handled; individuals in the office or location are subject to heightened supervision pursuant to securities regulatory rules; or proprietary trading activities or supervision thereof take place. Please see Rule 3

opt Supplementary Material .19 (Residential Supervisory Location) under FINRA Rule 3110 (Supervision)” (March 31, 2023) (“RSL Proposing Release”).8See SEC Release 34-98982 “Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change to Adopt Supplementary Material .18 (Remote Inspections Pilot Program) under FINRA Rule 3110 (Supervision)”, (November 17, 2023) (“Remote Inspection Adopting Release”), and see also SEC Release 34-98980, “Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, to Adopt Supplementary Material .19 (Residential Supervisory Location) under FINRA Rule 3110 (Supervision)”, November 17, 2023 (“Residential Supervisory Location Adopting Release”). The Remote Inspection Adopting Release was published in the Federal Register on November 24, 2023: see 88 Fed. Reg. 82464 (November 24, 2023). The Residential Supervisory Location Adopting Release was published in the Federal Register on that same day: see 88 Fed. Reg. 82447 (November 24, 2023).9The activities specifically enumerated as supervisory activities for purposes of the RSL designation are: “(D) final acceptance (approval) of new accounts on behalf of the member; (E) review and endorsement of customer orders; (F) final approval of retail communications for use by persons associated with the member, pursuant to Rule 2210(b)(1), except for an office that solely conducts final approval of research reports; or (G) responsibility for supervising the activities of persons associated with the member at one or more other branch offices of the member.” Also enumerated is the activity described at Rule 3110(f)(2)(B): “any location that is responsible for supervising the activities of persons associated with the member at one or more non-branch locations of the member […].” Notably absent from the definition of RSL are the ac