(This 10th March story corrects fifth paragraph to clarify brokers’ own inspections may be delayed)

FILE PHOTO: A street sign, Wall Street, is seen outside New York Stock Exchange (NYSE) in New York City, New York, U.S., January 3, 2019. REUTERS/Shannon Stapleton/File Photo

WASHINGTON (Reuters) - A U.S. regulatory body on Monday said it would temporarily waive some of its rules in order to allow thousands of traders to operate from home as the coronavirus spreads in New York.

The Financial Industry Regulatory Authority (FINRA), the self-regulatory body which oversees brokers, said traders could work remotely and recognized that firms may need to implement alternative supervisory systems to make that possible.

“In such cases, FINRA would expect a member firm to establish and maintain a supervisory system that is reasonably designed to supervise the activities of each associated person while working from an alternative or remote location during the pandemic,” it said in a notice.

FINRA oversees thousands of brokerages, dealing mainly in securities and corporate bonds.

FINRA added that brokers’ scheduled on-site inspections of their branch offices may need to be postponed, and that it would also temporarily waive some record-keeping requirements and be flexible if firms have difficulty meeting other filing obligations.

Wall Street banks and brokers have for weeks been in “robust” talks with regulators to secure a number of waivers that would allow staff to work from home as part of their broader coronavirus contingency plans, the chief executive of a top industry group told Reuters.

Overnight, the number of confirmed cases of the virus rose by 37 to a total of 142 people in New York, Governor Andrew Cuomo said on Monday. He has issued a declaration of emergency to bolster the financial hub’s efforts to contain the virus.

Kenneth Bentsen Jr., CEO of the Securities Industry and Financial Markets Association (SIFMA), which has been leading the industry response to the outbreak, said the group was discussing how companies could meet their compliance requirements if trading staff are not operating from a branch or a redundant site where they have high levels of oversight.

In addition to FINRA, the group has been in discussions with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), he said.

“We’re having very robust discussions, we’re all trying to figure this out on both sides,” said Bentsen.

“They’ve done this in the past around the 2008 financial crisis and 9/11. This is about identifying where there might be problems that could impair market operations, and providing guidance or forbearance on a temporary basis outweighs any potential risks.”

Banks including Morgan Stanley, JPMorgan Chase & Co, Bank of America, Goldman Sachs Group Inc and Citigroup Inc have triggered contingency plans, sending staff home, splitting up trading teams and activating backup offices in a bid to contain the spread of the virus in one of the world’s largest financial hubs.

Some of the issues banks have been discussing with regulators include how to replicate the technology required to supervise real-time trading from home; strict infrastructure requirements, since dealing in some markets requires dedicated telecommunications lines; records-keeping and cybersecurity.

There are some concerns that liquidity could be disrupted if traders are restricted in their activities when operating under remote work arrangements.

“The goal is to keep markets operating in a fair and orderly fashion: that’s the goal of the regulatory perspective and industry perspective, and to do it in a way that meets the rule sets,” said Bentsen.

The CFTC declined to comment, while the SEC did not immediately respond to requests for comment on Monday.