Regulatory Compliance E-newsletter - April2013
Posted On 4/17/2013 3:00:00 PM
Feature of the Month
NRS ComplianceGuardian™ Broker-Dealers Tools
ComplianceGuardian brings together best-in-class compliance tools, education and consulting into a “one-stop” online solution designed to give your firm a flexible, user-friendly and systematic framework to help ensure compliance. All Guardian subscriptions include an hour of consulting per month and your choice of three Desktop Seminars.
To assist broker-dealers in creating a culture of compliance and managing a successful compliance program, Guardian includes:
- Written Supervisory Policies and Procedures
- Model Documents
- FINRA Guides
- AML Training
- Monthly and Annual Compliance Program
- Registered Rep Manual
- News, Compliance Alerts and a Compliance Calendar
- RepTracker– NRS’s registered representative information management tool
Guardian is available with tools for broker-dealers, investment advisers and dually registered firms. Sign-up for a demo today to see how Guardian can help your firm.
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Automate your Rep and Operations Staff Registrations Management
Regulators are increasingly targeting the proper disclosures and registration updates during their examinations of firms. As the burden of registration management grows, while budgets largely stay the same, the case for automation of registration management increasingly makes sense.
Rep Insight allows you to automate registration management:
- Automatically submit all updates to FINRA’s CRD electronically
- Electronically collect, review and submit rep demographic updates, Outside Business Activities, registration and licensing information
- Automatically issue compliance alerts and flag issues if there are changes made to U4 information
- Monitor and report on CE windows
- Eliminate paper records for registration while maintaining records of all changes
Register for a ComplianceMAX Demo today or contact us for more information.
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Meet the challenges of a demanding regulatory environment
Investment advisory and broker-dealer firms are finding that regulatory examinations are more difficult than ever. Regulators have greater expectations and with the help of technology, are digging deeper. At the same time, implementing shifting compliance priorities uses resources and makes it challenging for firms to maintain and strengthen policies and procedures.
One of the best ways to help ensure that your firm is prepared to adapt to these current regulatory challenges and more changes down the pike is to build and support a knowledgeable and competent compliance staff with quality compliance education.
Whether your firm is newly registered or a seasoned entity, the suite of NRS educational choices, designed and delivered by industry experts, can help you and your firm expand regulatory compliance know-how and develop necessary risk management skills. Our onsite and online education options make it convenient for compliance officers to:
- Stay up to date with the latest industry news and compliance priorities
- Prepare for and address regulatory changes to establish strong, effective and efficient compliance programs and minimize risk
- Spot examination and enforcement trends before they reach your doorstep
- Gain experience in transforming rules and regulations into meaningful compliance procedures
- Demonstrate and understand how and which federal and state securities regulatory requirements shape your firm’s compliance program
- Develop the judgment needed to apply appropriate regulations and rules to assure complete coverage of compliance tasks
- Interact with other compliance professionals to build a network of resources
NRS offers both the Investment Adviser Core Compliance Program and the Investment Adviser Certified Compliance Professional (IACCP®) Program in addition to numerous individual online and onsite courses and customized training for investment advisers and broker-dealers. Visit www.nrs-education.com to find out how NRS Education can help you meet the regulatory demands of today and tomorrow.
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2013 SEC Regulatory and Examination Priorities
Each year, FINRA publishes its regulatory and examination priorities to highlight areas which focus on their current assessment of the key investor protection and market integrity issues on which they will focus in the coming year. For 2013 the regulatory body is citing, among others:
- Suitability and Complex Products - Compliance Tip: The best defense against a regulatory finding in this area is education, education, education! In order to fully comply with FINRA Rule 2111, ensuring the suitability of a recommendation, a registered rep must have a full understanding of complex or high-yield products. They must be aware of all potential failures in order to adequately explain the risk-versus-return profiles. They need to be able to spot disconnects between client expectations and risk tolerances. The most direct route to customer complaints and regulatory findings is to have registered reps offering products about which they are uncertain and/or unclear.
- Automated Investment Advice - Compliance Tip: FINRA has concerns with platforms which may not sufficiently obtain information to determine an appropriate investor profile or which can fail to properly match securities or portfolios with a client’s risk tolerance. To avoid problems in this area, ensure that sufficient controls are in place, assessing the integrity and transparency of underlying business rules, policies and procedures and testing protocols.
- Branch Office Supervision - Compliance Tip: A robust supervisory structure and inspection program must take into effect those locations that exhibit a higher likelihood of sales practice abuses, especially where brokers have higher-risk clients, complaints, disclosures or disciplinary histories on their records.
- Cyber Security and Data Integrity - Compliance Tip: As on-line and mobile access to customer account information becomes increasingly necessary from a customer-service perspective, the safety and integrity of sensitive customer data has to be a top priority, requiring substantial and robust safeguards to protect the data. Firms have to ensure they have sufficient resources dedicated to ensuring full integrity of data storage and the controls required. Firms must be certain they are not vulnerable to operational disruption of, and/or unauthorized access to its data.
- Insider Trading - Compliance Tip: As insider trading continues to be a top regulatory priority for FINRA, the SEC and federal criminal law enforcement, firms must be vigilant in safeguarding material, non-public information, periodically assessing information barriers and risk controls in effect, as well as monitoring the personal securities transactions of its staff.
- Anti-Money Laundering (“AML”) Programs - Compliance Tip: Firms with higher-risk business models due to their clients, products and service mix or location in which they operate face increased AML scrutiny. Insufficient due diligence concerning risks associated with foreign affiliates and the business they transact through the FINRA member broker-dealer can lead to a lack of knowledge as to who or how many underlying customers may be involved. Even for less high risk areas, the fact that the client “is a neighbor of” or is someone “I’ve known all my life” does not absolve the firm for undertaking sufficient background checks and obtaining legitimate identification.
NRS Consultants are available to review your applicable policies and procedures to ensure they conform to regulatory requirements and industry best practices and to offer guidance for their improvement, if necessary.
To find out how NRS can help you contact us today.
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