Supervision

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FINRA requires principals to supervise registered representatives. The member firm must establish and maintain written procedures to supervise the types of business it's engaged in and must supervise the activities of registered representatives. They must also designate a principal responsible for supervising each type of business in which the firm engages, and they must designate an "OSJ" (Office of Supervisory Jurisdiction).
The firm must perform internal inspections:
•    • • • • • • • • • • • • •
•    Each member shall conduct a review at least annually, of the    •
•    businesses in which it engage; which review shall be reasonably •
•    designed to assist in detecting and preventing violations of and    •
achieving compliance with applicable securities laws and regula-
•    don; and with the Rules of this Association. Each member shall •
•    review the activities of each office, which shall include the periodic •
•    examination of customer accounts to detect and prevent irregular- •
•    ities or abuses and at least an annual inspection of each office of •
supervisogjurisdiction. Each branch office of the member shall
•    be inspected according to a cycle which shall be set forth in the    •
•    firm's written supervisory and inspection procedures.    •
•    • • • • • • • • • • • • •
This is how FINRA defines office of supervisory jurisdiction (OSJ) and branch office:
•    • • • • • • • • • • • • •
•    Branch office: any location identified by any means to the public or •
•    customers as a location at which the member conducts an invest-
 •
ment banking or securities business
•    •
•    OSj• "Office of Supervisory jurisdiction" means any office of a •
member at which any one or more of the followingfunctions take

place:    •
•    •
(A) order execution and/or market making;
•    •
(B) structuring of public offerings or private placements;
•    •
•    (C) maintaining custody of customers' funds and/or securities;    •

(D) final acceptance (approval) of new accounts on behalf of the •
•    member;    •
•    •(E) review and endorsement of customer orders    •
•    •
(F) final approval of advertising or sales literature for use by
•    •persons associated with the member    •
•    •
(G) responsibilih,for supervising the activities of persons
•    •
associated with the member at one or more other branch offices of •
•    the member    •
•    • • • • • • • • • • • • •

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