Regulatory Compliance E-newsletter - November
Posted On 11/16/2015 8:47:00 AM
Feature of the Month
Conflicts of Interest / Risk Assessments Continue as a Regulatory Focus
The requirement to identify risks and adequately manage them, have been a major talking point in messages delivered by regulators in rules, regulatory notices and speeches. FINRA Regulatory Notices and interpretive materials, as well as in face-to-face meetings with industry leaders, the SEC and FINRA continue to make it crystal clear as to how their examiners will be focusing on the level of senior management involvement in firm-wide risk controls. Firms should be utilizing risk assessments as part of their compliance programs to help mitigate identified risks, with a focus on Conflicts of Interest.
NRS often finds that firms fail to develop a robust mechanism by which they can identify and document all potential risk areas and determining the level of risk presented by each. Developing a formal, enterprise-level, risk assessment process should be a part of every firm’s strategy to mitigate regulatory, market, reputational and business risks. As a best practice, a broker-dealer risk assessment should take into account a review of their Written Supervisory Policies and Procedures (“WSPs”), disclosures, testing protocols, changes to business practices, compensation practices and products/services offered to investors.
Strong supervisory systems and internal controls are the cornerstones for mitigating identified risks, helping to protect both the clients and the firm. NRS believes firms should continually review and assess all risks that could impact their business. Risks must be prioritized, with adequate controls put into effect in order to lessen potential repercussions.
Risk Assessment undertakings are often minimized, performed only once, or initiated only when major changes impact the business. The regulators have made it clear that a sound compliance program is one which inventories risks, on a continuing basis, taking necessary steps to implement a strategy to minimize their impact.
While many firms are capable of performing their own risk assessment, this project is often performed in a less than timely or meaningful manner. NRS Consultants can provide an objective third-party perspective, incorporating regulatory requirements and NRS’s deep knowledge of industry best practices to help firms effectively identify existing and emerging risk areas, offering guidance in the implementation of appropriate controls.
To find out how NRS can help, contact us today!
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Compliance Supervision in One Simple Step
Answer a few questions about your business and NRS’ ComplianceGuardianTM Calendar and Task List Tool for Investment Advisers creates a customized compliance task list that is synchronized with your firm’s policies and procedures. Once assigned to the appropriate areas of your firm, ComplianceGuardian will automatically send reminders so tasks are completed and not forgotten.
Regulators are always reviewing a firm’s policies and procedures and asking a firm to prove that the supervision and tasks listed in the manual are complete. With this task list, you can rest assured that completing the tasks means that you have done what is in the manual as NRS has pulled all the tasks out for you in one calendar driven list.
To learn more about our platform and how to integrate it with your compliance program, register for your demo today.
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Attend the NRS 31st Annual Spring 2016 Conference
New regulations and technology have changed the compliance function, and now both are essential components of the approaches the industry uses to develop and implement effective compliance programs. Attending compliance conferences is an easy and effective way to stay current on the latest industry developments that are critical to the sustainability of your firm's compliance program.
NRS Education is pleased to announce the Spring 2016 dates and location for the compliance industry’s longest-standing compliance conference.
Save the Date
NRS 31st Annual Spring 2016 Compliance Conference
for Investment Advisers and Broker-Dealers
May 10-12, 2016
Nobu Eden Roc Miami Beach
Miami Beach, Florida
Attend the NRS 31st Annual Spring 2016 Conference to:
- Interact with recognized industry experts — including regulators, compliance professionals and attorneys — to discuss today's toughest compliance challenges.
- Experience compliance in action - the convergence of knowledge and practical application in interactive sessions.
- Choose from sessions tailored for investment advisers, broker-dealers and private funds
- Build a support system of compliance peers and industry vendors to exchange ideas and meet great compliance professionals who will share proven strategies, practices and solutions.
- Experience the newly renovated Nobu Eden Roc Miami Beach on the Atlantic Ocean in Miami Beach, Florida, close to restaurants, shopping and night life
- Enjoy special events including keynote addresses and networking activities that incorporate Florida’s vitality
- Visit an exhibitor hall that makes it easy to compare compliance solutions for technology, education, consulting and insurance in one convenient venue. Bring your RFPs.
- Earn continuing education for multiple professional credentials
- Meet the NRS compliance teams who create and support our technology, consulting and education solutions.
To celebrate NRS’s 31st year of compliance conferences, please accept this special registration offer, valid through December 31, 2015. Register Now Use discount code NRS31 by 12-31-15.
We welcome your comments and questions. For more information, contact your NRS account manager, call 860-435-0200 or contact NRS Education at firstname.lastname@example.org.
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Once Again, It’s End-of-Year Compliance Crunch Time
The end of the year is fast approaching and that means it’s time for investment advisers and broker-dealers to ensure they’ve met their annual compliance requirements.
Investment advisers need to start preparing for their annual compliance program review. . Regulation requires that at least annually, IAs ensure that they have an effective compliance program in place which complies with applicable securities laws and regulations.
The SEC’s continued interest in the compliance program rule and new focus areas means that advisers must continually be prepared to demonstrate that they have accomplished a thorough, well-documented annual review. The SEC has stated that the firm’s compliance efforts are the first line of defense responsible for identifying, managing and supervising risk effectively and in accordance with laws and regulations. If there is a modicum of doubt whether an IA is prepared, then it is critical that the firm reviews its compliance program. NRS can help with the testing of policies and procedures and the required documentation, identifying areas of weakness and offering compliance solutions.
Broker-dealers are required to have an independent audit of their Anti-Money Laundering Program performed on an annual (calendar) basis (with a small number of BDs on a two-year cycle due to the extreme limitations of their securities-related activities).
In addition, they must comply, also on an annual basis, with FINRA Rule 3120 in terms of testing their written supervisory policies and procedures and FINRA Rule 3110 which calls for a “CEO Certification” to be executed indicating that the BD has a system of supervisory control policies and procedures reasonably designed to achieve compliance with applicable securities laws and regulations.
Also, by end of year, BDs must have held their Annual Compliance Meetings and finalized both their Continuing Education and Anti-Money Laundering training sessions.
Senior management of investment advisory firms and broker-dealers are ultimately responsible for setting the tone at the top and ensuring that an effective culture of risk management across the organization is in place.
NRS can help with all of these annually-required reviews in order to ensure that these financial institutions have adequate documentation and certification of their compliance responsibilities and are addressing deficiency findings.
NRS can provide both investment advisers and broker-dealers with the assurances that controls are in place and operating effectively. With nearly 30 years of compliance expertise, we offer solutions ranging from consulting and training to technology tools to help firms successfully run their compliance program, enabling them to feel confident they are meeting SEC, FINRA and state regulator expectations.
By choosing NRS Outsourced Compliance Services, firms augment staff, lower costs and ensure compliance success. Contact us to schedule a consultation assessment, or call your NRS Representative at 1-860-435-0200.
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