Rule 3110 Describes Four Office Classifications

In general, a member firm’s office or location is either registered as a branch office, if it meets the definitions contained in Rule 3110(f), or exempt from branch office registration (i.e., an unregistered office or non-branch location), if it fits within an express exclusion from the branch office definition listed in Rule 3110(f)(2)(A)(i)–(vii) or is designated as a residential supervisory location (or RSL) under the terms of Rule 3110.19.

Rule 3110 describes four classifications of member firm offices and locations as follows: (1) office of supervisory jurisdiction (or OSJ); (2) supervisory branch office; (3) non-supervisory branch office; and (4) non-branch location.

Office of Supervisory Jurisdiction

An “office of supervisory jurisdiction” (or OSJ) is any office of a member at which any one or more of the following functions take place:

order execution or market making;
structuring of public offerings or private placements;
maintaining custody of customers' funds or securities;
final acceptance (approval) of new accounts on behalf of the member;
review and endorsement of customer orders, pursuant to paragraph (b)(2) above;
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
responsibility for supervising the activities of persons associated with the member at one or more other branch offices of the member.

See Rule 3110(f)(1).

In accordance with Article IV, Section 8 of the FINRA By-Laws, an OSJ must be registered with FINRA using Form BR (Uniform Branch Office Registration Form). See also Rule 3110(a)(3). A member firm must designate an appropriately registered principal to an OSJ. See Rule 3110(a)(4). An OSJ is subject to an annual inspection under Rule 3110(c)(1)(A).

Branch Office—Supervisory and Non-Supervisory

A “branch office” is any location at which one or more associated persons of a member regularly conducts the business of effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security, or is held out as such. See Rule 3110(f)(2)(A).

In addition, a location is a “branch office” if it is responsible for supervising the activities of associated persons at one or more of the member firm’s non-branch locations. See Rule 3110(f)(2)(B). This type of branch office is also known as a “supervisory branch office.”

In accordance with Article IV, Section 8 of the FINRA By-Laws, a branch office must be registered with FINRA using Form BR. See also Rule 3110(a)(3). A member firm must designate to each branch office an appropriately registered representative or principal with authority to carry out the supervisory responsibilities assigned to that branch office. See Rule 3110(a)(4). A branch office that is a “supervisory branch office” is subject to an annual inspection schedule under Rule 3110(c)(1)(A). A branch office that is a “non-supervisory branch office” is subject to a three-year inspection schedule under Rule 3110(c)(1)(B).

Non-Branch Location (or Unregistered Office)

In general, Rule 3110 describes eight locations that are exempt from branch office registration. These locations are classified as “non-branch locations” (or “unregistered offices”). Seven of these non-branch locations are express exclusions—appearing under Rule 3110(f)(2)(A)(i)–(vii)—from the “branch office” definition. The eighth non-branch location—the RSL—appears in Rule 3110.19.

The non-branch locations described in Rule 3110(f)(2)(A)(i)–(vii) and Rule 3110.19 are listed below:

(1) Non-Sales Location – Any location that is established solely for customer service or back office type functions where no sales activities are conducted and that is not held out to the public as a branch office;

(2) Primary Residence – A location that is the associated person’s primary residence provided that:

Only one associated person, or multiple associated persons who reside at that location and are members of the same immediate family, conduct business at the location;
The location is not held out to the public as an office and the associated person does not meet with customers at the location;
Neither customer funds nor securities are handled at that location;
The associated person is assigned to a designated branch office, and such designated branch office is reflected on all business cards, stationery, retail communications and other communications to the public by such associated person;
The associated person’s correspondence and communications with the public are subject to the firm’s supervision in accordance with this Rule;
Electronic communications (e.g., e-mail) are made through the member's electronic system;
All orders are entered through the designated branch office or an electronic system established by the member that is reviewable at the branch office;
Written supervisory procedures pertaining to supervision of sales activities conducted at the residence are maintained by the member; and
A list of the residence locations is maintained by the member.

(3) Non-Primary Residence – A location, other than a primary residence, that is used for securities business for less than 30 business days in any one calendar year, provided that:

Only one associated person, or multiple associated persons who reside at that location and are members of the same immediate family, conduct business at the location;
The location is not held out to the public as an office and the associated person does not meet with customers at the location;
Neither customer funds nor securities are handled at that location;
The associated person is assigned to a designated branch office, and such designated branch office is reflected on all business cards, stationery, retail communications and other communications to the public by such associated person;
The associated person’s correspondence and communications with the public are subject to the firm's supervision in accordance with this Rule;
Electronic communications (e.g., e-mail) are made through the member's electronic system;
All orders are entered through the designated branch office or an electronic system established by the member that is reviewable at the branch office; and
Written supervisory procedures pertaining to supervision of sales activities conducted at the residence are maintained by the member.

(4) Office of Convenience – A location that is not held out to the public as an office at which an associated person occasionally and exclusively by appointment meets with customers;

(5) Location Used Primarily for Non-Securities Transactions – A location that an associated person uses primarily to engage in non-securities activities and from which the associated person effects no more than 25 securities transactions in any one calendar year provided that any retail communication identifying such location also sets forth the address and telephone number of the location from which the associated person conducting business at the non-branch location is directly supervised;

(6) Registered National Securities Exchange Floor – A location where a member firm conducts a direct access business with public customers;

(7) BCP Location – A temporary location established in response to the implementation of a business continuity plan (BCP); and

(8) Residential Supervisory Location (or RSL) – A location that is a private residence at which an associated person engages in specified supervisory functions, including those listed in the OSJ definition—Rule 3110(f)(1)(D), (E), (F), and (G)—and Rule 3110(f)(2)(B), subject to specified eligibility requirements and conditions.

A non-branch location is subject to a presumptive three-year inspection schedule. See Rule 3110(c)(1)(C) and Rule 3110.13.