SurgeONE.ai Helping You Stay Compliant with FINRA Supervision & Ethics Rules

Introduction

In a landscape where an organization’s reputation and market goodwill can be as valuable as financial capital, regulatory alignment sets the tone for sustained success. Establishing credibility in the wealth management sector begins with a firm commitment towards compliance and integrity.

Following FINRA Rules 3110 and 2010 shows your firm's dedication to doing business correctly by adhering to the dictated mandates. These rules are of utmost importance and shape how wealth management firms earn trust from clients, regulators, and everyone else in the financial and investments ecosystem.

Why Use SurgeONE.ai for Regulatory Compliance

SurgeONE.ai makes it easier for wealth management firms and financial institutions to keep up with regulations by automating checks, streamlining oversight, and tracking user behavior. This lowers the risk of getting in trouble with regulators and helps build a strong ethical culture that supports growth and public confidence. All this leads to lesser risk to the organization and a stronger ethical base to support your firm’s growth and build customer trust.

Let Us Break Down the FINRA Rules for Supervision & Ethics

FINRA Rules 3110 and 2010 dictate how a wealth management firm operates and supervises its operations, and how it ensures an ethical footprint in the industry. Understanding how SurgeONE.ai fits in with these regulatory requirements will help you get to know why it is becoming so popular in the RegTech world.

A. FINRA Rule 3110 on Supervisory Systems

Rule 3110 mandates that all FINRA broker-dealers must have supervisory systems or protocols designed to supervise the activities of each of its associated persons to achieve compliance with applicable securities laws and regulations, and FINRA rules. This includes:

• Written Supervisory Procedures (WSPs): Clear policies on who is responsible for supervision of each aspect of the firm’s business, what they will supervise, how they will supervise, and what records they will maintain to evidence their supervision.
• Branch Inspections: Main offices must be checked every year. Other branches must be checked at least every three years.
• Communication Monitoring: Firms must check internal and external messages to find problems early.

This rule is all about being proactive, not just having policies which may or may not be enforced company-wide. It is about keeping the wealth management industry authentic and protecting all the parties involved in it.

How SurgeONE.ai helps with this:

SurgeONE.ai focuses on automated compliance and oversight, so that wealth management firms can create and maintain strong supervisory systems. It allows you to  aggregate your supervisory documents in one place and automates regular compliance tasks and workflows.

1. Virtual Branch Inspections: Conduct remote inspections using multi-level or tiered organizational setup functionality, which saves time and capital, while still following FINRA’s inspection rules. SurgeONE.ai is great for remote checks and oversight, especially with FINRA’s Remote Inspections Pilot Program (Rule 3110.18). This rule lets some broker-dealers perform certain inspection activities remotely, instead of in-person, to modernize compliance practices while maintaining investor protection.
2. AI-Powered Reviews: Machine learning keeps an eye on electronic messages and trades, pointing out communications that could mean trouble. It also watches trading to spot things like insider trading or too much risk. All AI-Powered Reviews are then elevated to a human supervisor for final supervisory review.
3. Automated Recordkeeping: Keep track of supervisory actions, inspection results, and compliance alerts, demonstrating how your firm is complying with Rule 3110.
4. Written Supervisory Procedures (WSPs): Help you create and update WSPs that help you satisfy your obligations under Rule 3110(b) and address common policy deficiencies, like which supervisors are responsible for supervising what area of your business, what reviews will they complete, how will their reviews be evidenced and what records will be retained evidencing their reviews.
5. Supervisory Dashboards: Help you monitor your organization’s compliance program to determine where it may be lacking and resolve detected deficiencies before they turn into regulatory deficiencies. It gives real-time info, so firms can keep up and act fast when new risks pop up thus helping firms minimize their regulatory risks as well as their reputational risks.
6. ‍Vendor Management: Allows you to automate your firm’s vendor due diligence and vendor management processes to address FINRA Rule 3110 and to minimize third-party risks and cybersecurity risks.

B. FINRA Rule 2010 on Ethical Standards

FINRA Rule 2010 is more about setting ethical standards in financial services. It is broad and extensive in its interpretation, so FINRA can act against any ethical wrongdoing, even if it does not break a specific rule.

This includes:

• Misleading or taking advantage of clients
• Unfair markups or sales practices
• Anything that hurts the industry’s integrity

Rule 2010 is a reminder that upholding business ethics goes hand in hand with adhering to regulatory compliance. It asks financial professionals to do the right thing, act with integrity to protect investors and supporting the values of “fair, just and equitable principals of trade”.

How SurgeONE.ai assists with compliance to this rule:

SurgeONE.ai supports ethics by combining AI checks with automated content review:

1. Behavioral Monitoring: Machine learning helps firms spot unethical behavior, like misleading messages, undisclosed conflicts of interest, outside business activities which may involve private securities transactions which frequently result in formal regulatory enforcement actions which can trigger fines and reputational damage to your firm and its supervisors.
2. E-Comms Scanning: SurgeONE.ai users can check AI-generated and human messages to be sure they meet FINRA’s standards for ethics and advertising including fair and balanced communications. SurgeONE.ai looks at client emails, marketing documents, and disclosures to make sure they are fair and balanced.
3. ‍Policy Enforcement: Helps firms survey risky behaviors and or activities of their associated persons which could signal the need for closer review of such activities or necessitate more formal heightened supervision of the individual.
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Understanding Why it is Important to Comply With FINRA Rules

Non-conformance to these FINRA rules can lead to steep penalties. Consider the following example of disciplinary action taken by FINRA:

FINRA Department of Enforcement vs Bingshan Song (2022077267703) [Action Date: 06/23/2025]

According to FINRA, “from February 2021 through the present, Song failed to reasonably supervise Velox Clearing's business-related electronic communications on a non-firm communications platform used by Velox associated persons, in violation of FINRA Rules 3110 and 2010. Song also sent and received thousands of business communications on a non-firm communications platform that the firm failed to capture and review, thereby causing Velox to maintain incomplete books and records, in violation of FINRA Rules 4511 and 2010. For these violations, Song is suspended for one month in all capacities, followed by a four-month suspension in all principal capacities, fined $25,000, and required to complete 10 hours of continuing education.”
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Rule Violations:

• FINRA Rule 3110: Failure to establish and maintain a supervisory system designed to prevent violations.
• FINRA Rule 2010: Failure to adhere to ethical conduct and fair dealing practices expected in the securities industry.

FINRA-Implemented Sanctions:

• Monetary fine of $25,000.
• Suspension from association with any FINRA member firm in any principal capacity for a period of one month.
• Suspension from acting in all principal capacities for a period of four months.
• Requirement to complete 10 hours of continuing education.
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Streamlining Compliance Through Smart Automation

SurgeONE.ai helps broker-dealers and wealth management firms meet FINRA’s standards for supervision and ethics by building a culture of honesty.

SurgeONE.ai alleviates the load on compliance teams by automating key compliance tasks. Wealth management personnel can now spend more time on value-added actions to build their business and enhance their client relationships, instead of having to waste time performing repetitive manual compliance tasks, they can instead redeploy that time to focus their supervisory efforts on sales practices, trading activities and other areas which create regulatory, civil and reputational risk to the organization and its customers.
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Conclusion

Wealth management firms are using RegTech platforms like SurgeONE.ai to stay compliant and improve how things are run as applicable regulatory updates or amendments get harder to keep track of.

SurgeONE.ai deploys generative AI to help financial institutions streamline regulatory compliance and risk oversight. The platform provides structured workflows, configurable reporting tools, and audit trails. SurgeONE.ai enables firms to build stakeholder trust by enhancing transparency and operational accountability.

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Learn more at surgeone.ai.

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