As remote and hybrid work arrangements become the norm, FINRA’s introduction of the Residential Supervisory Location (RSL) designation under Rule 3110.19 marks a pivotal shift in how firms can conduct supervisory activities outside traditional branch offices. For compliance officers, this presents both an opportunity for flexibility and a mandate for rigor in oversight, documentation, and technology adoption.

This article breaks down the essentials of the RSL program and highlights actionable steps your compliance team should take, based on insights from FINRA’s official FAQs, webinars, quick guides, and state-specific updates.

What Is an RSL?

An RSL is a private residence where supervisory functions are conducted, without the need for the location to be registered as a branch office. This status reflects FINRA’s acknowledgment of modern work trends and its desire to align regulatory expectations with operational realities.

Under FINRA Rule 3110.19, an RSL is treated as a non-branch location—but it must meet specific eligibility and oversight conditions.

Who Qualifies for RSL Designation?

Not every supervisory employee or firm is eligible. FINRA outlines detailed criteria:

  • Individual supervisors must:
    • Have at least one year of supervisory experience
    • Not be under investigation or on heightened supervision
    • Perform supervisory functions primarily from the residential location
  • Firms must:
    • Have a clean disciplinary record
    • Perform a risk-based assessment of each proposed RSL
    • Update Written Supervisory Procedures (WSPs) accordingly

NOTE: As of April 2025, Texas and Washington have formally recognized RSLs under their state-specific rules, meaning firms operating in these states can now designate RSLs without needing separate branch registration in those jurisdictions​. To see a full report, click here.

Permitted Activities at an RSL

Supervisory functions that can be performed from an RSL include:

  • Approving new accounts
  • Endorsing orders
  • Reviewing and approving retail communications
  • Supervising other branches or registered reps

However, client-facing activities are not allowed at RSLs unless otherwise permitted by the firm’s policies or local laws​.

What Needs to Change in Your WSPs?

Your firm’s Written Supervisory Procedures must be updated to:

  • Include eligibility criteria for RSL designation
  • Define inspection schedules (typically every 3 years)
  • Outline technological controls for oversight and cybersecurity
  • Address recordkeeping practices that meet FINRA’s expectations

Strong WSPs should also require attestations from RSL-designated supervisors and clearly state how the firm monitors productivity, communications, and supervisory quality remotely​.

Regulatory Filings: U4, BR, and Beyond

  • To update a Form U4 for RSL, you need to access the FINRA Gateway, locate the relevant individual’s Form U4, and navigate to the “Office of Employment Address” section. You can then either edit an existing non-registered, private residence location or add a new one, and respond to the RSL question.
  • For locations transitioning from branch offices to RSLs, firms must file Form BR amendments to officially de-register the branch.
  • Firms should also leverage FINRA Gateway’s Firm Group (FG) Profiles, where RSL indicators and key dates are now visible. A new Quick Reference Guide outlines how to identify and track RSL status within these reports​.

Common Compliance Challenges

Implementing an RSL program isn’t without its hurdles:

  • Misinterpretation of RSL eligibility, especially when hybrid or part-time remote arrangements are involved
  • Inconsistent inspection schedules or documentation
  • Varying state recognition—though more states are aligning with FINRA, compliance teams must still verify local rules
  • Cybersecurity risks, particularly if residential technology setups lack enterprise-level protections

Oversight Technology & Inspections

FINRA recommends firms adopt workflow tools that support:

  • Real-time supervision and escalations
  • Secure data storage and remote audits
  • Regular testing of cybersecurity protocols
  • Documentation of all supervisory activities performed from an RSL

💬 Participating in FINRA’s Remote Inspection Pilot Program may reduce on-site visits but requires even more detailed compliance records and policies.

Final Takeaway for Compliance Officers

The introduction of the RSL designation is a positive step for firms embracing hybrid work—but it demands thoughtful execution. Compliance teams must:

  • Perform thorough risk assessments
  • Update procedures and Form U4s accordingly
  • Leverage secure technology solutions
  • Monitor supervisors effectively
  • Stay ahead of state-level developments

By proactively managing these responsibilities, firms can unlock the flexibility of remote supervision without compromising compliance integrity.