Regulatory Compliance E-newsletter – January 2016

Feature of the Month

Improve your 2016 Branch Audit Program

Under the increased scrutiny of today’s regulatory environment, your audit program should quickly identify and mitigate risks to protect your firm. Do you feel confident that your program will successfully circumvent regulatory disciplinary action?

  • Can you effectively gather and analyze your 2015 audit data to establish a 2016 Risk Matrix?
  • Do you have sufficient corrective action protocols to expedite deficiency resolution?
  • Do you have safe storage for audit reports, supporting artifacts and sensitive documents?
  • Would your program benefit from an unbiased third party to mitigate conflict of interest?

Did you find your 2015 branch audit program to be challenging or concerning? NRS can increase the efficiency and effectiveness of your program with our Audit Solutions. Whether you’re looking for NRS to manage the process start-to-finish or you wish to implement a technology that will standardize your processes and support your audit team, NRS has the solution you need. Choose the option that best fits your firm:

Outsourcing Co-sourcing Technology
NRS’s professionally staffed Audit Team conducts the inspections on behalf of the Broker Dealer. The Outsourcing option relieves you of the burden of scheduling and traveling to conduct your audits.  Allow NRS to conduct the field work for you and deliver your audit results, so you can redirect your focus on managing the overall health of your compliance program.  NRS audit results are delivered securely via The ComplianceMAX technology, allowing for quick data reporting and streamlined corrective action processes. A flexible and collaborative approach that allows you to meet expanding audit obligations and control costs. NRS’s professionally staffed Audit Team will become an extension of your Compliance Program. NRS is available to visit any of your branch locations at a single fixed rate, while absorbing unpredictable travel costs.  With the help of NRS, you will no longer find yourself in the unhappy situation of being short staffed or unable to promptly conduct high risk inspections, without conflict of interest. The ComplianceMAX technology can be implemented into any level of Audit Solutions. You will immediately recognize a dramatic boost in productivity and increased job satisfaction. ComplianceMAX consolidates spreadsheets, emails, faxes and other manual processes into one secure and centralized repository for your data, documents and other audit materials.


For more than a decade, NRS has operated the largest and most comprehensive branch inspection service in the industry. On average, NRS’s team of auditors have over 15 years of experience and conduct more than 2000 audits per year. No other provider in the industry enhances your audit program with such expertise or scale.

For more information on Audit Solutions, contact us or sign up for a demo today.

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Compliance Technology That Withstands Regulatory Scrutiny

More than just policies and procedures that are updated quarterly, NRS ComplianceGuardian™ is your go-to online compliance portal for the entire firm.

NRS Consultants have created investment adviser, broker-dealer and private fund versions of Guardian so that it meets the needs of your particular firm. Investment advisers and private funds can easily customize the Code of Ethics; and track as well as archive the required annual attestation. The IA and PF versions also allow anyone in your firm to report violations — anonymously or not — with the violation report feature. Add on the Personal Securities Trading module and the firm can automate the trading oversight required by the code of ethics rule. The broker-dealer version includes RepTracker which allows you to easily track your registered rep licenses and continuing education as well as U4 changes. The Outside Business Activities (OBA) Module lets you maintain a tight approval process for your registered reps. With each version, you can add consulting or education to your subscription to keep up to date with current regulatory trends or to help you with firm-specific questions.

Interested in learning more about NRS ComplianceGuardian? View our video or register for a demo today.

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Differentiate Yourself and Your Firm by Earning the NRS IACCP® Designation

In 2016 many investment adviser compliance professionals are including education in their plans as a way to both help advance their careers and stay-up to date on the current regulatory and compliance requirements and initiatives. Often, a standard reaction of compliance professionals is taking a course when a new SEC rule is released. While this reaction fills an important need, the industry is demanding a more structured and encompassing approach to investment adviser compliance education.

The NRS Investment Adviser Certified Compliance Professional®(IACCP®) Program, co-sponsored with the Investment Adviser Association (IAA), is a professional education program granting the designation, Investment Adviser Certified Compliance Professional (IACCP), to individuals who complete an online and/or in-person instructor-led program of study, pass a certifying examination and meet its work experience, ethics and continuing education requirements.

The NRS IACCP program:

  • Provides participants and their firms with a solid understanding of current regulations and rules required for investment advisers
  • Provides resources to help strengthen the firm’s compliance program and promote continuous learning within the firm
  • Encourages candidates to apply what they learn as they learn it
  • Signals recognition of advanced compliance knowledge and skill level to help differentiate you from other compliance professionals
  • Allows firms that educate compliance personnel to add another cost- and time-effective risk management tool
  • Demonstrates the firm’s commitment to an educated workforce and a strong culture of compliance
  • Helps advance compliance as a profession
  • Supports the community of compliance professionals

For those who want to take the first step toward advancing their investment adviser compliance education with a less intensive curriculum, the NRS Investment Adviser Core Compliance Program provides a foundation with focus on the first level of compliance courses. By completing 10 courses and submitting an Ethics assessment, compliance professionals can earn a Certificate of Achievement, which can then be applied for credit in the future toward the IACCP Program requirements. Review the Core Program requirements.

Earning the IACCP designation helps identify you as a committed compliance leader and demonstrates your firm’s commitment to compliance. Join 575 compliance professionals who have earned the NRS IACCP® designation.  A full schedule of courses makes it convenient to advance your compliance career this semester.

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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Are you prepared for the SEC’s “ReTIRE Initiative”?

The SEC has announced that staff is conducting a targeted examination of SEC-registered investment advisers and investment companies who advise or sell investment products to retail investors saving for retirement in accordance with a previous announcement by The Office of Compliance Inspections and Examinations (“OCIE”) that one of its 2015 Examination Priorities included matters of importance to retail investors and investors saving for retirement. The purpose of the “sweep” exam is “to assess Registrants’ compliance with provisions of the Advisers Act and the rules thereunder, with a particular emphasis on services to investors saving for retirement,” focusing on “retirement-based savings in recognition of the complex and evolving set of factors that retail investors face when making such investment decisions.”   The SEC’s “ReTIRE Initiative” document request letter (13 pages) is currently being sent to firms and includes the following instructions:

“We request that you make adequate office facilities available to the staff during the on-site examination to ensure the confidentiality and efficiency of the examination.  After arriving on-site, the staff would like to speak with at least one member of senior management to obtain an overall view of Registrant’s organization, business, compliance program, and compliance culture.  Early in the on-site portion of the examination, the staff would also like to discuss Registrant’s overall compliance program as well as specific policies and procedures with Registrant’s Chief Compliance Officer(s).  Also during the on-site portion of the examination, in order to understand fully Registrant’s operations and compliance controls in these areas, the staff will want to interview persons responsible for functions such as risk management, portfolio management, research, back office/administration, information technology and marketing.

The scope of requested information is extensive, and appears to be above and beyond materials specifically related to services provided to retirement accounts.  Among other things, the list includes:

  • written guidance and training materials provided to employees
  • marketing/advertising materials used to solicit or inform clients; materials presented / accessible on the Internet (i.e., websites, blogs, etc.); use of third-party websites or databases containing performance or marketing info provided by the RIA;
  • if RIA’s website includes password-protected access by clients, investors or IARs, provide temporary user name /password for use by examiners;
  • if the RIA sponsors or participates in seminars or conferences: a list of such events, attendee list, list of clients introduced to RIA per event; all presentation/handout materials; and agreements entered into with sponsors, or a written description of relationship and responsibilities if no written agreement;
  • If Registrant provides management services, programs, products, or if Registrant or an affiliate is a qualified retirement plan’s named Qualified Default Investment Alternative (“QDIA”) (see The Pension Protection Act of 2006 for information regarding QDIA status), provide:
  1. A list of all retirement plans for which Registrant or an affiliate is the QDIA.  Provide the name of the management service, program, or product or affiliate and include the amount of plan assets.
  2. A list of all retirement plans where Registrant has recommended that a registered investment adviser serve as a QDIA. Identify both the investment adviser and the amount of plan assets.

Firms with affirmative responses to either (a) or (b) above, where the plan participant is responsible for paying the advisory fee must respond to an additional 18 or 7 items respectively.

In light of the ever increasingly active regulatory environment, it is crucial that you review your compliance program, consider any gaps, and develop and implement an action plan. Don’t know where to start? Need help with assessing your compliance program or designing a plan of action for your firm? NRS can help.  Contact us today for more information.