The US Financial Regulatory Authority is proposing to allow the firms that it regulates to complete their inspection-related obligations remotely through the calendar years of 2020 and 2021, the better to cope with the Coronavirus.

FINRA proposed to adopt temporary Supplementary Material .17 under FINRA Rule 3110 to permit the use of remote inspections to satisfy the obligations set out by Rule 3110(c)(1)(A), (B) and (C) that require each firm to conduct an annual office inspection.

Rule 3110.17, if passed, would also oblige each firm to (i) change written supervisory procedures under Rule 3110(b)(1) accordingly, (ii) impose additional supervisory procedures if signs of non-compliance or "red flags" are identified during a remote inspection, and (iii) keep centralised records that identify the remote inspection and any such imposed additional supervisory procedures.

If this works out reasonably well for the two-year period, regulators ought to think seriously about extending this kind of "regulatory relief" permanently, even if the virus has ceased to be a material threat.