Definition: An Office of Supervisory Jurisdiction (OSJ) is any office of a FINRA member firm at which one or more of the supervisory functions listed in FINRA Rule 3110(f)(1) take place. They include order execution or market making, custody of customer funds or securities, final acceptance of new accounts, final approval of retail communications, and responsibility for supervising associated persons at other branch offices.

What does the rule require of an OSJ?

The rule lists seven functions, any one of which makes an office an OSJ. Four are order execution or market making; structuring public offerings or private placements; custody of customers' funds or securities; and final acceptance of new accounts. Final approval of retail communications is another function, except for an office that only gives final approval to research reports. The other two are review and endorsement of customer orders, and responsibility for supervising associated persons at one or more other branch offices.

FINRA Rule 3110 requires one or more appropriately registered principals in each OSJ to carry out its supervisory responsibilities, with a general presumption that one principal will not be designated as the on-site principal of more than one OSJ. The firm must inspect each OSJ, and each branch office that supervises one or more non-branch locations, at least annually, on a calendar-year basis. A branch office that does not supervise any non-branch location is inspected at least every three years.

The designation belongs to a location, not a person, and the broker-dealer still owns the supervisory obligation.

Why do advisors talk about OSJs as businesses?

In independent brokerage, OSJ also names a business: an advisor or enterprise that holds the designation and offers other advisors affiliation, staff and technology. A large one that supervises many branches is often called a super OSJ, which is an industry label, not a rule term. OSJ is a broker-dealer concept. There is no OSJ in the RIA structure. Continuum's field guide What Is an OSJ? covers what changes when you join one and what to ask first.

Where it shows up in our data

OSJ affiliation is not part of the SEC's IAPD registration record that our counts read. Moves are counted firm to firm, so a change of OSJ inside the same broker-dealer appears as a move only when the advisor's investment adviser registration also changes firms, for example when the new OSJ runs its own RIA. Movement Map shows moves by state, and Advisor Channel Flow shows them by business model.

Sources

  1. Rule textFINRA Rule 3110 (Supervision) FINRA
  2. Public recordBrokerCheck FINRA
  3. ReferenceWhat Is an OSJ, and What Changes If You Join One? Continuum

Editorial standard: Continuum publishes education for financial advisors. It is general information, not legal, tax, or compliance advice.