Regulatory Compliance E-newsletter – December 2016

Feature of the Month

Announcing NRS Spring 2017 Compliance Conference – May 1-3, 2017 in Nashville, Tennessee

For 32 years, investment adviser and broker-dealer compliance professionals have been attending NRS Compliance Conferences to learn from industry experts about the latest compliance challenges, strategies for building a strong compliance program, and trends that are expected to influence compliance in the future.

The Spring 2017 Compliance Conference, being held May 1 – 3, 2017 continues this tradition with a content-rich, three-day program with a roster of speakers including regulators, former regulators, attorneys and compliance professionals plus multiple peer networking opportunities.

Reasons to Attend:

  • Gain essential knowledge on compliance topics making headlines today
  • Engage in interactive workshops that present real life applications  
  • Interact with thought leaders, who are on the front lines of compliance
  • Participate in peer leaning discussions on common issues, challenges and solutions
  • Earn continuing education credits
  • Access exhibitors showcasing products and services that support compliance operations

NRS has selected Gaylord Opryland Resort & Convention Center in Nashville, Tennessee as the venue for our Spring 2017 Compliance Conference.  Opryland hotel offers attendees the finest in Southern hospitality and an unforgettable getaway with all the excitement and energy of Music City under one spectacular roof. Located only 10 minutes from the airport and featuring an extraordinary selection of dining, shopping, recreational activities and entertainment, there’s never a shortage of things to do at the resort. Explore the nine acres of lush indoor gardens and cascading waterfalls, view the international waters fountain show nightly, go on a riverboat tour traveling down a scenic river through a 4.5 acre indoor garden, make a splash at the indoor or outdoor pool, visit the spa, play a round of golf or hit the gym at the state-of-the-art fitness center. 

Registration for the NRS Spring 2017 Compliance Conference is now open. Take advantage of our Early Bird rate by registering by December 31, 2016. Included with your registration fee is access to all the main conference sessions, continental breakfast and refreshment breaks in the exhibitor area, buffet luncheons, evening receptions, electronic conference materials and a conference app..

Join NRS at our Spring 2017 Compliance Conference where we will provide you with critical data and skills needed to maximize your resources to develop and maintain a dynamic and flourishing compliance program. 

Register now

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Reduce Fund Expenses and Preserve Shareholder Value

Blue Sky Solution™

Transactional Exemption Module restores the transparency to omnibus accounts. It gives control over blue sky reporting back to the Fund by applying user configured rules to existing Data Share Activity and Position data to generate daily sales reporting feeds to a bluesky reporting system. The data provides account and transaction details necessary for the rules to systematically identify and filter out transactions that are not blue sky reportable and those transactions that are eligible for exemption from blue sky reporting, while categorizing and reporting all required transactions that represent the reportable blue sky sales. The accuracy of reporting is improved by removing the “middle man” and the benefit of the exemptions would otherwise be lost through omnibus reporting. This solution reduces costs through the apportionment of appropriate fees allowing for tighter blue sky reporting controls which result in preservation of shareholder value and improved accuracy in blue sky reporting.

The Transactional Exemption Module:

  • Allows a fund to repurpose existing data used in compliance monitoring for frequent trading activity, to facilitate compliance with blue sky reporting in conjunction with the offer and sale of securities in a particular state
  • Eliminates the need for “inception-to-date” files from intermediaries by replacing them with output files that have been created using a rules engine to catalog transactions as reportable or exempt
  • Provides complete transparency to blue sky sales activity and greater accuracy in blue sky reporting by eliminating the need for complicated processes required to maintain “inception-to-date” files.
  • Enables users to set up rules that systematically identify eligibility for the range of states’ exemptions
  • Reduces fund expenses and preserves shareholder value by maximizing recognition of transactional exemptions to reduce Mutual Fund sales based notice filing fees
  • Can be implemented to replace one, two, some or all of your Broker-Dealer omnibus feeds over a period of time it’s not an “all or nothing” approach
  • Eliminates the need for time-consuming, manual research of large trades by systematically identifying transactions in accounts that qualify as sales to “institutional investors” or “accredited investors”
  • Is a valuable add-on to NRS’s Blue Sky Solution or NRS’s Blue Sky Administration services

For more information on the Blue Sky Solution System, Contact Us today!

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NRS Education is Preparing for the New Year. Are you?

From professional development programs and web-based seminars to in-person annual conferences and investment adviser symposia, NRS provides a comprehensive selection of practical compliance education options designed to inform and enlighten staff at investment adviser, investment company and broker-dealer firms. Review the NRS Education 2017 Calendar for education options that fit your needs and schedule.

NRS Education events are also designed to meet criteria for continuing education credits for CPA/accountants, compliance professionals, attorneys, certified final 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 incorporating compliance into your firm’s daily business operations and minimizing your firm’s risk.

Education On-Site and In-Person:

Directed Compliance Education Programs:

Unlimited Flexibility for Learning Your Way:

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.


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What effect will the Election have on the DOL Fiduciary Rule?

With last month’s presidential election victory of Donald Trump over Hillary Clinton and with the Republicans holding the majority in both the Senate and the House of Representatives, the question being raised is whether the Republican sweep in Washington means a demise for the Republican-opposed Department of Labor fiduciary rule. What is the fate of the fiduciary rule once the change in power occurs in January?

No one, including NRS, knows the answers to this question.  However, all financial services firms should keep an eye on the lawsuits trying to stop implementation of the new rule.  At the time of this writing, this is the current status of these suits:

  • National Association for Fixed Annuities – rejected November 2016. NAFA has filed an emergency motion to stop the rule’s implementation while they pursue an appeal.
  • Market Synergy – Request for a preliminary injunction rejected November 2016.
  • Three suits in the Northern District of Texas have been consolidated and the first hearing was held on November 17.  A motion to stay is pending.

Ultimately, what may decide the fate of the DOL’s rule is the priority placed on it by the new administration. As Andy Friedman, of The Washington Update states, “If overturning the DOL rule is a top priority of the new administration, it will happen. However, if taking action is not on the list of priorities, it is possible the new rule could take effect before repeal procedures are finalized”.   Here are some steps the new administration may consider:

  • Instruct the DOL to stop defending the new rules in the current lawsuits.
  • Issue an interim final rule delaying the applicability dates of the rule and then open the rulemaking process
  • Terminate the effectiveness of the rule by showing “good cause” for dispensing with the notice and comment procedure typically required by law

Since there are only 80 days between the inauguration on January 20 and the April 10 applicability date, there simply may not be enough time between the inauguration and the applicability date for any of these steps to be effective.   

While we do not know what course the new Administration will follow, the worst-case scenario is clear: the rules are not delayed and your firm is not in compliance on April 10.  NRS strongly recommends continuing the planning and implementation process in the months ahead.

The time to act is now. Let NRS help you determine how your firm needs to evolve to answer the demands of the new fiduciary rules, contact us today.


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