Regulatory Compliance E-newsletter - May
Posted On 5/11/2015 11:06:00 AM
Feature of the Month
ComplianceGuardianTM offers Personal Securities Trading Module
Will your Code of Ethics program pass a regulatory examination? Personal securities transactions and insider trading violations are a perennial concern of the SEC. However, unlike some areas of compliance that may be subject to interpretation, compliance with personal trading rules can be clearly measured. A manual review process can take hours and can be error prone.
The ComplianceGuardian PST Module:
- Integrates the firm’s Code of Ethics
- Automates Trade Preclearance Reviews and Exception Processing based on the Code of Ethics rules set by the firm
- Automates Reporting for Annual Holdings, Quarterly Transactions and Initial Holdings
- Creates the required Attestations and Automates Archiving
- Manages Multiple Restricted Lists Simultaneously
In addition, NRS consultants can be engaged to review your Code of Ethics, monitor exceptions and notify the firm of trends that put the firm at risk. The Personal Securities Trading Module is one of the only solutions that integrates personal trading rules into a Code of Ethics, reviews requests and trades against the rules as well as providing consulting expertise to oversee the process.
Click here for more information or to schedule a ComplianceGuardianTM PST Demo today or contact us for more information.
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NEW Customer Complaints Module
On May 27th, at the 2015 FINRA National Conference, NRS will be launching a new ComplianceMAXTM (cMAX) Customer Complaints Module designed to help your firm adhere to FINRA Rule 4530. The Module was created with input from NRS’ regulatory consultants, an internal team of UX specialists and external research conducted with clients. The product launch reinforces NRS’ commitment to its core market and expanding its product portfolio in an effort to offer more solutions that clients demand.
The cMAX Customer Complaints Module, like other cMAX modules, allows you to design and implement a custom configured offering that meets the specific needs of your organization. You can establish what data is collected, how it is routed through your firm, and what alerts and notifications are sent.
In a proactive approach to managing customer complaints, the Module enables you to:
- Document each complaint’s unique details, background and supporting information
- Capture all investigation findings and documents in one location
- Automate the submission of Quarterly Statistical and Event Disclosure filings to FINRA to meet Rule 4530 reporting requirements
- Track repeat complaints as iterations without necessary data re-entry
- Notify and remind the involved departments of outstanding tasks
- Identify patterns or trends before they materialize into more serious concerns for your firm
Register for a ComplianceMAX Demo today or contact us for more information.
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Experience the Convenience and Relevance of NRS Desktop Seminars
The NRS 2015 Education online schedule includes a wide range of compliance fundamentals – from a series of Advisers Act courses to ethics, trading and skill-based courses – to help investment adviser, broker-dealer and investment company compliance professionals update and refine their compliance programs.
For example, of timely importance is the topic scheduled for May 28, 2015: Data Protection: Privacy, Identity Theft and Cybersecurity. As many compliance professionals heard at the NRS Spring 2015 Compliance Conference this week, the SEC will soon announce phase 2 of its Cybersecurity Initiative including one-to-two day onsite examinations.
NRS Desktop Seminars:
- Offer compliance professionals an opportunity to be briefed with the facts and insight on new and existing regulatory initiatives;
- Are designed to generate thought-provoking conversations
- Include complimentary 10-day access to recordings for online seminars you attend
- Offer continuing education credits for those who attend in real time.
NRS also welcomes your suggestions for topics you would like us to research and present. In response to your requests, NRS added a new two-hour Desktop Seminar on November 12, 2015 that will be focused on the new proposed ERISA “fiduciary” rule.
View the updated NRS Education calendar to see how easily NRS can be part of your firm’s compliance education plan.
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Risk Assessments / Conflicts of Interest Management Continue to be of Concern to the Regulators
Identification of risks and policies to adequately manage them remain at the forefront of broker-dealer regulatory exams. SEC and FINRA have both been very 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.
FINRA continues to hold to its comment in the 2013 “Report on Conflicts of Interest,” in which it stated that “FINRA expects firms to consider the practices presented in this Report and to implement a strong conflict management framework.”
NRS continues to find that numerous firms are still failing to develop a sufficiently robust mechanism by which they can identify and document all potential risk areas and determining the level of risk presented by each.
Given the regulatory emphasis in these areas, every firm should have a well-developed, documented, formal, enterprise-level, risk assessment process. There should be a clear 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.
NRS believes firms should routinely review and assess all risks that could impact their business. Identified risks must be prioritized, ensuring strong supervisory systems and internal controls in effect 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 the impact of each.
While many firms are capable of performing their own risk assessment, this project is seldom performed in a timely or meaningful manner. NRS Consultants can provide an objective third-party perspective, incorporating regulatory requirements and NRS’ 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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