Tape Recording Employees

Certain firms may be subject to special supervision requirements if a significant amount of its registered agents came from a firm or firms that have been disciplined by regulators. Firms that are subject to the taping rule must implement special written procedures and begin taping the conversation of its registered personnel and customers within 60 days of being notified by FINRA that the firm has become subject to the taping rule. The firm also must implement written procedures to retain, review, and classify the recordings. Firms that fall into the following categories must tape their employees:

  • Has more than five but less than 10 registered representatives and 40% or more have come from disciplinary firms within the last three years
  • Has at least 10 but less than 20 registered representatives and four or more have come from disciplinary firms within the last three years
  • Has 20 or more employees and at least 20% have come from disciplinary firms within the last three years

A broker dealer who has been notified by FINRA that they are subject to the taping rule has a one-time option to reduce their number of registered representatives. If the firm elects to reduce a portion of the subject agents to eliminate the taping requirement, for 180 days, the firm may not rehire the subject agents who were eliminated.  


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