Broker-Dealer Risk Assessment and Testing
Regulators expect broker-dealers to have developed an internal risk assessment program that both identifies risks and develops policies and procedures to minimize those risks.
A central and necessary component of a sound compliance program is testing your firm’s actual compliance with its written policies and procedures. Once risks are identified and policies and procedures are in place, what testing procedures are needed to ensure that the controls are effective?
Instructors will provide guidance on identifying the risks pertinent to broker-dealers, offering ways in which those risks can be managed, or at least mitigated, by developing corresponding policies and procedures. Risks to be discussed include those falling under operational, legal, reputational, credit and regulatory “categories,” and instructors will explore risk areas such as conflicts of interest, hiring practices, new and/or complex products, surveillance practices, outside business activities, books and records, suitability, branch offices, rep compensation, customer complaints and regulatory inquiries.
A discussion of risk versus reward will help determine what business model offers the greatest returns while at the same time ensuring the least risk of failure or censure.
After attending this course, attendees should be able to:
- Identify regulators’ expectations for a broker-dealer Risk Assessment Program
- Conduct a robust, firm-wide risk assessment by including all relevant departments, from senior management to IT personnel
- Explore ways to mitigate identified risks
- Implement an appropriate testing procedure to help maintain effective controls that minimize risk
For whom: Designed to increase the professional competence of broker-dealer professionals with legal, compliance, technology, operations and management responsibilities
Suggested Skill Level: Basic
Instructional Method: Group Internet-Based
Prerequisites for participation:
No prerequisites are required. However, attendees can benefit by reviewing FINRA’s October, 2013 “Report on Conflicts of Interests.”
Advance Preparation: None
Continuing Education Credits:
See NRS Continuing Education Guide
Recommended CPE Credit: 2 in the Regulatory Ethics field of study<
Recommended IACCP® CE Credit: 2
Recommended CA MCLE Credit: 2
Recommended CFP® Credit: Pending