In light of new regulations imposed by brokerage regulators, including the Financial Industry Regulatory Authority (Finra), Wall Street firms such as Barclays Plc are contemplating the possibility of requiring employees to commute to company offices five days a week. While the more stringent in-person mandate is expected to primarily impact operations overseen by Finra, firms are carefully deliberating the potential implications, according to undisclosed sources familiar with the matter.

The talks have progressed to a point where certain managers have already begun notifying employees about the potential shift to daily commuting, indicating that the decision may be imminent, as per one source. Truist Financial Corp. recently announced a similar five-day policy, set to affect some of its staff located on Wall Street. These developments come as Finra implements a host of new requirements in the coming weeks, responding to the challenges posed by the work-from-home era.

Initially, when the COVID-19 pandemic forced the industry to transition to remote work, regulators temporarily relaxed surveillance rules for firms. However, over the past few months, regulators have introduced measures to address the flexibility that firms provide to their employees. These measures include new rules that necessitate brokerages to disclose certain home offices in regulatory records, as well as establishing inspection protocols for periodic workplace assessments within certain home office setups.

While these regulatory changes are intended to accommodate remote work, some firms may question the feasibility of meeting the additional compliance obligations and make the decision to recall affected employees to work full time in the office. Nevertheless, not all firms are expected to reach the same conclusion. Deutsche Bank AG executives, for instance, have examined Finra's requirements and believe the firm can achieve compliance without significant disruptions to their work-from-home protocols, according to a source familiar with the situation.

Representatives for Barclays and Deutsche Bank declined to comment on the matter, while a spokesperson for Finra had no immediate response regarding anticipated office policies in response to the regulatory changes. It is worth noting that a majority of financial firms still offer remote work options, with only 20% of financial-services companies requiring full-time office attendance, according to a survey conducted in early 2023. However, firms have been tightening their rules in recent times.

In line with this trend, Truist recently informed its investment-banking staff that they would be required to work from the office every weekday starting June 1. Additionally, the bank intends to implement a hybrid working model, where the majority of its workforce will be expected to commute to the office four days a week at a later date. The decision by Truist was motivated by the belief that the best work is accomplished when employees are physically together, as expressed by a spokesperson for the bank.

As the financial industry continues to navigate the changing landscape of work arrangements, financial firms will need to carefully consider the regulatory requirements, employee preferences, and the overall productivity impact before finalizing their policies regarding in-person attendance.