As proposed, FINRA's recently proposed Operations Professional registration category would impact those individuals who qualify as a "covered person" - i.e., meets the depth of personnel criteria - and who engage in one or more of the "covered functions."  Let's look at the details.

    Covered Persons.   The following individuals would have to register with FINRA as an Operations Professional:

• Senior management with responsibility over the covered functions;
• Supervisors, managers or other persons responsible for approving or authorizing work, including work of other persons, in direct furtherance of the covered functions; and
• Persons with the authority or discretion materially to commit a member’s capital in direct furtherance of the covered functions or to commit a member to any material contract or agreement (written or oral) in direct furtherance of the covered functions.

Someone who performs a covered function, but whose responsibilities are below these specified levels, wouldn't be required to register as Operations Professionals - as determined by the member Firm. 

The terms "materially" or "material," used in Category #3, would be based on a member’s pre-established spending guidelines and risk management policies.  As explained in proposed supplementary material .06, Scope of Operations Professional Requirement, the following would not have to register:

• any person whose activities are limited to performing a function ancillary to a covered function;
• any person whose function is to serve a role that can be viewed as supportive of or advisory to the performance of a covered function;
• any person who engages solely in clerical or ministerial activities in a covered function.

Accordingly, internal audit, legal or compliance personnel who review but don't have primary responsibility for any covered function wouldn't be required to register as an Operations Professional.

    Covered Functions for Inclusion in New Registration Category.   Those who meet the above thresholds as a covered person, must also engage in one or more of the following covered functions:

1. Client on-boarding (customer account data and document maintenance);
2. Collection, maintenance, re-investment (i.e., sweeps) and disbursement of funds;
3. Receipt and delivery of securities and funds, account transfers;
4. Bank, custody, depository and firm account management and reconciliation;
5. Settlement, fail control, buy ins, segregation, possession and control;
6. Trade confirmation and account statements;
7. Margin;
8. Stock loan/securities lending;
9. Prime brokerage (services to other broker-dealers and financial institutions);
10. Approval of pricing models used for valuations;
11. Financial control, including general ledger and treasury;
12. Contributing to the process of preparing and filing financial regulatory reports;
13. Defining and approving business requirements for sales and trading systems and any other systems related to the covered functions, and validation that these systems meet such business requirements;
14. Defining and approving business security requirements and policies for information technology, including, but not limited to, systems and data, in connection with the covered functions;
15. Defining and approving information entitlement policies in connection with the covered functions; and
16. Posting entries to a member’s books and records in connection with the covered functions to ensure integrity and compliance with the federal securities laws and regulations and FINRA rules.

    Stock Loan Personnel.   FINRA's proposed rule change also would include persons engaged in or supervising stock loan/securities lending activities that meet the depth of personnel as a covered person. FINRA also is proposing separate registration categories for a "Securities Lending Representative" and a "Securities Lending Supervisor."

To access the FINRA Pronouncement, go to:   [RULE Filing 11-13, 3/4/11]