Last week, Bloomberg reported that Citigroup, HSBC, and Barclays were forcing more of their people to return to the office five days a week “as regulatory changes make it trickier for Wall Street to allow working from home.” Said Bloomberg in their story:
Citigroup is requiring about 600 US employees previously eligible to work remotely to commute to company offices full-time, the New York-based firm said in a statement Thursday. Even then, the majority of staff can continue their hybrid schedules, working up to two days a week outside the office, it said.
Barclays will require thousands of investment banking staff globally to spend five days a week in the office or traveling to see clients, beginning from June 1, it said late Thursday in a memo. The decision — after Bloomberg reported the bank was weighing a five-day office mandate for more US staff — coincides with the “new regulatory policies,” it said.
“Being together in the office drives innovation, collaboration and a stronger culture,” wrote Cathal Deasy and Taylor Wright, the firm’s global co-heads of investment banking. “We remain committed to flexible working and we recognize that there will be times when you will need to work from home,” they said, adding that group heads have discretion to allow occasional flexible working where needed.
Related story from June 2023:
As the Bloomberg story made the rounds around social media and other sites picking up the story, FINRA quickly pushed out a statement “correcting misinformation”:
FINRA has seen recent statements from firms stating that new, stringent rules from FINRA will require them to bring their workforce back to the office full time. This is incorrect. FINRA notes that a location from which an associated person regularly conducts securities business on behalf of a member firm, including a home office, has always been subject to possible disclosure, registration and inspection under FINRA rules and applicable rules of other regulators. The COVID-19 pandemic prompted FINRA to provide member firms with temporary relief from many of these requirements. After a three year plus rulemaking process on our new rules, during which FINRA engaged in substantial outreach to member firms, FINRA informed member firms in January that the temporary relief would come to an end on May 30, 2024, a year after the official end of the pandemic.
Hold up, so banks straight up lied to their employees? A shocking turn of events.
FINRA explained in their statement that the new rules “provide member firms greater flexibility for their registered persons to work from home.” Rules that, according to FINRA, member firms (i.e. banks) expressed support for.
Our new Residential Supervisory Location (RSL) Rule and Remote Inspections Pilot Program Rule are intended to provide member firms greater flexibility — not less — to allow eligible registered persons to work from home [emphasis ours], following the expiration of temporary COVID-19 relief from existing requirements. The new rules provide a practical and balanced way for firms to meet their regulatory obligations, while protecting investors, and acknowledging the need for greater workplace flexibility.
Rule 3110.19, which becomes effective on June 1, treats a private residence at which an associated person engages in specified supervisory activities, subject to certain safeguards and limitations, as a non-branch location. As a non-branch location, this newly defined residential supervisory location (or RSL) will be subject to inspections on a regular periodic schedule — likely at least every three years — instead of the annual inspections currently required for an office of supervisory jurisdiction (OSJ) and “supervisory branch office.” It sounds like RSLs will be a paperwork headache for banks — they must conduct and document a risk assessment and provide a list of RSLs to FINRA by the 15th day of the month following each calendar quarter — but that’s a far cry from “FINRA is making you come back into the office.”
Anyone who has worked a corporate job knew that was just a rationalization, and yet this article makes it pretty clear that the banks are more than just being cautious. Taking NYC as an example, how many people have a home office that would qualify for the home office deduction? How many people would accept the cost of a quarterly inspection deducted from their salaries? And what will employees do when they find out their home set up wouldn’t meet the FINRA standard, or the NYS nonresident withholding requirements if they lived in NJ?
I can’t believe this article got me to side with the banks. I would love to see one bank offer to keep WFH for people who are willing to trade the compliance costs for remote work, and subject themselves to quarterly inspections. The bosses would stay home and the associates would all have to come in.
They all need to stop whining and go to the office and do their job. If you do not like it, then move on and find another job.
This finra ruling is beyond moronic. Banks are going to continue bleeding talent to fintech / tech with better WLB. The fact that we’ve had WFH for 4 years and essentially nothing bad has come of it based on “home office environment”, yet they feel the need to poke around, which of course the banks would never allow. They knew what they were doing with this and to suggest the banks are overreacting or misinterpreting is childish.
Nothing bad has come of it? How about how much harder it’s been for executives to keep their eye on the help?
“Being together in the office drives innovation, collaboration and a stronger culture,” wrote Cathal Deasy and Taylor Wright, the firm’s global co-heads of investment banking.
Are there any studies proving this? If not, then it’s just an opinion.