On July 30, 2024 FINRA has issued Regulatory Notice 24-10, reminding members of its longstanding policy prohibiting the recording of conversations between FINRA staff and member firm personnel during oversight-related calls or meetings. This policy extends to both audio and video recordings and includes all related technologies. The Notice underscores the continued relevance of this policy amidst technological advancements that facilitate recording and transcription.

Background and Discussion

Originally established in March 2000 through Notice to Members 00-18 (NTM 00-18), FINRA’s policy against recording calls and meetings remains a crucial component of its oversight framework. Technological progress since the release of NTM 00-18 has made recording easier with tools such as cell phones, personal devices, and AI-powered virtual meeting applications. These technologies not only facilitate the recording of audio and video but also enable the generation of detailed transcripts and summaries.

However, the availability of these technologies raises concerns akin to those highlighted in NTM 00-18. Modern recording devices and AI tools can produce altered or inaccurate representations of conversations. As a result, FINRA has reiterated that members and their associated persons are prohibited from recording any conversations with FINRA staff during exams, investigations, or related oversight functions without express permission.

Key Points:

1. Prohibition on Recording: Members and their associated persons must not use audio or video recording devices or technologies, including AI tools, during any FINRA-related calls or meetings. This includes recording conversations, capturing slides, or generating transcripts.

2. Consistency with Rule 2010: FINRA’s prohibition aligns with Rule 2010, which mandates high standards of commercial honor and principles of trade. Unauthorized recordings could be seen as inconsistent with these standards.

3. Legal and Policy Considerations: Many state laws also require consent from all parties before recording conversations. FINRA’s policy reflects these legal requirements and asserts that consent for recording is not typically granted during oversight functions.

Conclusion

Understanding and complying with FINRA’s recording policy is essential for maintaining regulatory standards and avoiding potential violations. If you have any questions regarding the implications of this Notice or need assistance navigating FINRA’s requirements, our team at Anderson P.C. is here to help.

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