Hedge Fund / FINRA WSP Overlay

What the overlay adds

• A Written Supervisory Procedures register mapping each procedure to the AI systems and use cases it governs.
• Supervisory review workflow with a named supervising principal, review cadence, and evidence of review.
• SEC marketing-rule checks for AI-generated or AI-assisted client-facing material.
• Books-and-records retention attributes on documented information.
• An additional control set covering communications review, personal trading, model validation, and vendor due diligence.

Written Supervisory Procedures

FINRA expects supervisory procedures that are specific, assigned, and actually followed. The register captures each procedure, the rule it responds to, the supervising principal accountable for it, the review frequency, and the evidence produced by each review. Where a procedure governs an AI system — a research summarization model, a trade-surveillance tool, a client-communications assistant — that system links directly to the procedure, so a reviewer can see both together.

Supervisory review cycle

• Each procedure carries a cadence: daily, weekly, monthly, quarterly, or annual.
• Reviews are performed by the named principal or an approved delegate; delegation is recorded with dates.
• A review is not complete without an outcome and, where applicable, an exception record.
• Overdue reviews escalate on the dashboard and in scheduled email digests.
• Exceptions link to Risk Register entries so unresolved issues remain visible.

Marketing-rule checks

AI-assisted client-facing material carries specific exposure: performance claims, hypothetical results, testimonials, and predictions of return. The overlay adds a pre-use checklist for any material produced with AI assistance, records who approved it, retains the reviewed version, and flags material that leaves the platform without approval. This is a supervisory aid, not an automated legal review.

AI-specific risk themes

• Model opacity in investment research and the difficulty of reconstructing a recommendation.
• Hallucinated citations or figures in client communications.
• Data leakage of position or client information into third-party model providers.
• Vendor concentration where several tools depend on one underlying model provider.
• Drift in surveillance models producing silently degraded alerting.

Reporting and retention

The overlay produces a branded DOCX supervisory report suitable for regulatory examination, a CSV export of the WSP register with MM/DD/YYYY HH:MM dates and RhindonCyber_ filename prefixes, and an exceptions log. Every supervisory action writes an org-scoped audit entry mirrored to the platform audit log, giving you an immutable review trail alongside the records themselves.

Enablement

The overlay is enabled per tenant by Rhindon rather than self-served, because it changes the control set and reporting surface. Contact support to have it activated on your organization.