Regulatory Compliance E-newsletter - September
Posted On 9/3/2015 12:28:00 PM
Feature of the Month
Realize the Benefits of Automated Bidirectional FINRA Filing with NRS’ cMAX Advertising Review Module
Processing the required filings to FINRA’s AREF system and retrieving the review letters for advertising material are administrative tasks that can consume a great deal of your compliance department’s capacity. Enable your compliance professionals to spend more time on compliance and risk mitigation activities, and less time on being administrators.
NRS’ ComplianceMAX (cMAX) can do just that with technology that automates the filing of advertising material to FINRA (with Principal approval), and the retrieval of the review letter once it becomes available. Once the approved filing has been made, your compliance professionals can focus on other activities with the peace of mind that they will be alerted once the review letter has been prepared by FINRA and automatically downloaded to the original filing in cMAX.
Aside from the benefits of automating the filing, the cMAX Ad Review Module provides much more to your firm.
Key features and benefits:
- A Foundation Built on NRS Consultant Expertise
- SEC 17a-4 Compliant
- A Central Data Repository backed by a comprehensive Business Continuity Plan
- Flexible Workflow that can be tailored to your firm’s procedures
- Customizable Form Content to ensure Data Integrity
- Ability to incorporate Single-Sign-On and recurring imports of User Hierarchy to simplify user access and maintenance
Sign-up for a demo today to find out how NRS can help you take control of your Advertising compliance.
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NRS ComplianceGuardianTM Compliance Calendar
ComplianceGuardian creates a due date driven task list taken directly from an investment adviser’s policies and procedures manual to deliver actionable compliance-specific tasks. Driven by ComplianceGuardian’s profiling feature, the intelligent task manager allows firms to assign tasks to users within their firm and ComplianceGuardian will automatically provide email reminders each month. The calendar functionality streamlines an adviser’s compliance processes by enabling task-sharing across the entire firm.
As regulatory pressures increase, advisory firms are wise to streamline and automate compliance processes. By extracting task information from policies and procedures manuals and linking content to calendars increases accessibility and ensures a firm’s compliance within their own mandates. ComplianceGuardian’s calendar functionality delivers lists of compliance-related tasks that outline what individual employees must accomplish and when. This unprecedented solution empowers advisers to efficiently maintain best compliance practices and satisfy regulatory demands.
Features and benefits of the, which comes fully integrated with ComplianceGuardian for Investment Advisers and Private Fund managers includes:
- Automatic synchronization and shared information across tasks lists, calendars and policies and procedures manuals
- Updates from NRS consultants on new and annual filing deadlines, as defined by regulators
- Customized task assignments and regular email reminders
- Reduced risks of non-compliance
Sign-up for a demo today to find out how ComplianeGuardian's compliance calendar can save you time and give you piece of mind.
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Connect, Engage and Excel with NRS Compliance Education
From professional development programs and web-based seminars to in-person conferences, NRS Education provides a comprehensive selection of practical compliance education options designed to train and enlighten staff at investment adviser, investment company and broker-dealer firms. Review the NRS 2015 Education Calendar for education options that fit your needs and schedule.
NRS Education events are designed to meet criteria for continuing education credits for CPA/accountants, compliance professionals, attorneys, certified financial planners and other financial services professionals.
In today’s fast-changing regulatory environment, the need to educate staff at every level is paramount to successfully and continually incorporating compliance into your firm's business operations, satisfying regulatory requirements and minimizing your firm's risk.
Directed Compliance Education Programs
Guided curricula designed to prepare investment adviser compliance staff for success in a changing regulatory environment:
Timely investment adviser and broker-dealer compliance topics in a conference setting where you can interact with other compliance and legal professionals:
Unlimited Flexibility for Learning Your Way
Convenient compliance education options provide up-to-date intelligence where and when you need it.
We are always eager to hear about the specialized topics and forms of content delivery that you and your firm need to stay current, so please keep the suggestions coming.
Excel as a compliance professional with support from NRS Education. Learn more or contact an NRS representative today at 1-860-435-0200.
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Anti-Money Laundering (“AML”) Rules Proposed for SEC-Registered Investment Advisers
The U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has proposed a rule requiring SEC-registered IAs to establish AML programs.
While FinCEN is limiting the current proposed rule to investment advisers registered or required to be registered with the SEC, future rulemakings may include other types of investment advisers, such as state-regulated investment advisers or investment advisers that are exempt from SEC registration, that are found to present risks to the U.S. financial system of money laundering, terrorist financing, and other types of financial crimes.
From the proposal: “FinCEN recognizes that the different types of investment advisers included within today’s proposed definition may present varying degrees of money laundering and terrorist financing risks. FinCEN, therefore, anticipates that the burden of establishing an AML program would also correspondingly be reduced due to the risk-based nature of the program and the types of advisory services these entities provide.”
There are three regulatory changes in the FinCEN proposal:
- Including investment advisers within the general definition of “financial institution” in the regulations implementing the Bank Secrecy Act (BSA) and adding a definition of investment adviser;
- Requiring investment advisers to establish AML programs; and
- Requiring investment advisers to report suspicious activity.
Upon this proposal being approved, IAs would be required to:
- Create and implement an AML program which meets the minimum requirements of the rule;
- Ensure that the AML Program is approved in writing by the IAs' board of directors or trustees, its sole proprietor, general partner, trustee or other persons with functions similar to a board; and
- Allow for the AML Program to be available to FinCEN or the SEC upon request.
At a minimum, the IA’s AML Program must:
- Include and implement policies, procedures and internal controls “reasonably designed to prevent the investment advisers from being used to facilitate money laundering or the financing of terrorist activities” and to achieve and monitor compliance with applicable BSA provisions, taking into consideration the adviser’s risk assessment;
- Provide for periodic independent testing for compliance to be conducted by company personnel who are not involved in the operation and oversight of the program or by a qualified outside party;
- Designate a person or persons to be responsible for implementing and monitoring the program’s operations and internal controls with a designated compliance officer who should be an officer of the adviser; and
- Provide ongoing training for appropriate persons.
Concerning #2 above, there is no timeframe given in the proposal as to how often a “periodic” testing must occur. FinCEN states in the proposal: “the frequency of the independent testing will depend upon the IA’s assessment of the risks posed.”
While many investment advisory firms have developed, as a best practice, an AML Program, they will need to revisit the Program to incorporate the following:
Under FinCEN’s regulations that apply to a broad range of commercial activity, investment advisers are currently required to file reports on Form 8300 for the receipt of more than $10,000 in cash and negotiable instruments.
The proposed rule would replace this requirement with a requirement that investment advisers file Currency Transaction Reports (CTRs) pursuant to 31 CFR 1010.311, to be filed for a single-day transaction involving a transfer of more than $10,000 in currency by, through or to the investment adviser.
Under the Recordkeeping and Travel Rules, financial institutions must create and retain records for transmittals of funds, and ensure that certain information pertaining to the transmittal of funds “travel” with the transmittal to the next financial institution in the payment chain.45 Accordingly, the proposed Rule requires that records be maintained regarding transmittals of funds that equal or exceed $3,000.
The proposal also sets for the obligation of investment advisers to report suspicious transactions that are conducted or attempted by, at, or through an investment adviser and involve or aggregate at least $5,000 in funds or other assets. The $5,000 minimum amount in this proposed rule is consistent with the suspicious activity report (SAR) filing requirements for most other financial institutions that are subject to a SAR reporting requirement under FinCEN’s rules implementing the BSA.
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