Regulatory Compliance E-newsletter – November 2017

Feature of the Month

Are you gambling with your regulatory future?

Don’t roll the dice, learn to improve your odds. Attendees at the NRS Fall 2017 Conference enjoyed the excitement of Las Vegas while gaining knowledge and skills enabling them to customize their compliance solutions and turn the regulatory odds in their favor.

Attendees enjoyed direct access to NRS’ highly experienced consultants and experts in NRS technology and were the first to learn about our new cybersecurity offering in partnership with Fortress. Tracks tailored for IAs, BDs and dual registrants allowed attendees to focus on content most relevant to them. Sessions included the “classics” such as Trading Challenges, Testing Toolbox, Trends in IA Enforcement Proceedings, Advertising and Social Media, New and Never Examined Firms, SEC and FINRA Exam Workshops, as well as hot topics including Machine Learning and Artificial Intelligence, Robo-Advisers, Cybersecurity, New Form ADV Amendments, ERISA Fundamentals and Fiduciary Rule Update, Tips for Buying and Selling Securities Firms, WORM Electronic Storage Media, and a Senior Investor, Senior Colleague session.

Keynote speakers included the SEC’s Michele Wein Layne and David Tittsworth of Ropes & Gray, who discussed the “new” SEC and offered timely information to help attendees navigate the current regulatory environment including changes to the regulatory agenda, the increasing pace of SEC exams (15% of all IAs are expected to be examined in 2018), and a gradual change in the SEC’s “broken windows” enforcement philosophy. Other highlights were sessions on Ethical Decision-Making for Compliance Professionals and the Critical Skills for High-Performance Compliance Professionals which covered the Seven Deadly Sins: Common Ways Investment Advisers Violate Their Fiduciary Duty.

The Fall Conference featured two new pre-conference sessions which enabled participants to evaluate and build ‘soft skills,’ coping techniques and strategies for success: Applying Business Analysis Tools to Compliance and Women in Securities Compliance.

The NRS Consulting team concluded the conference with many essential takeaways which included:

  • The need for compliance professionals’ further exploration and discussion of women in securities compliance;
  • The SEC Exam pace is expected to increase 30% in 2018, leaving no room for complacency;
  • Many firms are still struggling with technological aspects of cybersecurity and vendor due diligence;
  • There is still confusion between and surrounding the identification of conflicts with Personal Securities Transactions and Outside Business Activities;
  • The need to start early in preparing information for the new Form ADV 1;
  • Despite the increasing focus on automation and technology, it is more important than ever to ensure ‘soft skills’ proficiency.


Plan now to join us at the 2018 Spring Compliance Conference at the Westin Savannah Harbor Golf Resort & Spa Savannah, Georgia and our regional symposiums! In the meantime, don’t miss out on the exceptional opportunities to enhance and build upon conference sessions by exploring our webinars (including, by popular demand, the new Women in Securities Compliance webinars), the IACCP Program and offerings in technology and training. To up the ante, you could also lay your cards on the table directly with our professional consulting staff; high roller status not required. Want to improve your odds and up your game? We can help; contact us today.


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Is a Recorded Annual Compliance Meeting OK for an IA?

Heck yes! If you have the same difficulty getting everyone in a room or on a conference call at the same time as 99.9% of other companies, then an online Annual Compliance Meeting is right for your Investment Adviser.

Think about it this way, scheduling an Annual Compliance Meeting during the work day has significant opportunity costs. Certain questions have to be asked:

  • What are our costs when we take an hour or hour and a half out of everyone’s day to attend a compliance meeting?
  • Can we reduce those costs by having our advisers attend a meeting outside of work hours or at their convenience as they have time available?
  • If I can’t get everyone together in the same meeting, how do ensure the meeting and messaging is delivered to every group?
  • Why am I using my valuable time to schedule and deliver multiple meetings?
  • Why am I spending multiple days or weeks planning and preparing content when I can obtain what I need from an available source?

Compliance officers can and have saved thousands of dollars and hundreds of hours of time for their firms by using solutions at their disposal. One such solution that can help is NRS FIRE’s ACMNow Online Training, which provides an effective way to address all the questions above by allowing compliance officers to:

  • Select the meeting topics that are relevant to their firm, while the NRS team creates the meeting, processes your student roster, and schedules email notifications and reminders. Topics include some of the most critical recorded IA topics with audio, such as:
    • Anti-Money Laundering – Policies and Procedures
    • Asset Allocation
    • Ethics
    • Fiduciary Responsibilities
    • Guide to Protecting Customer Information
    • Identity Theft – FACT Act
    • Investment Adviser – Basics
    • Know Your Customer
    • Privacy Protection Rules
  • Customize topics. Through ACMNow, Compliance Officers can specifically tailor training towards their IA’s.
  • Track all associated metrics including time spent in the meeting, answers to questions, and attendee certifications through automatically generated reports.


Whether your advisers complete their Annual Compliance Meeting requirement during lunch or from their couch on the weekend, ACMNow is available anytime and anywhere from any internet connected browser on a computer or mobile device.

Learn more about ACMNow by going here.


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OBAs – Don’t get caught in the traps

If you don’t have enough to worry about, go to FINRA’s online repository of disciplinary actions and enter “Outside Business Activities” in the search box. You’ll find that Outside Business Activities (OBAs) are a recent and frequent source of disciplinary actions resulting in fines and months long suspensions. If OBA management were a golf course, it would be mostly sand traps and water hazards. Fortunately a few best practices and the right tools can change the look of the course and help you stay on the fairway.

Capturing, updating, tracking, and recording Outside Business Activities (OBAs) is not easy. However, if you can do these three things, to protect yourself, your reps, and your firm:

  • Ask often and make it easy to respond – How often? As much as possible. If you are a high performing firm, you have go-getter reps who are probably trying new things all of the time. Help them out by reminding them to update their OBAs frequently. The best OBA solution will let you add a link to any communication. Reps should be able to click the link, see a list of their OBAs and make any additions or changes on the spot.
  • Keep complete records – Your record keeping should be active. Even if a rep has no changes, a periodic attestation should be completed. You should be capturing and retaining all attestations, notices and responses. The best systems will create and maintain this audit trail automatically and secure it in 17a-4 compliant storage.
  • Make sure your internal records match Web CRD – You can get all of the right information and store it safely, but if your internal records don’t match those in Web CRD, you can still have problems. Keeping Web CRD updated is yet another burdensome and error-prone step if your process is manual. The best systems are fully integrated, will automatically update Web CRD with approved OBA activities to ensure that your internal records are always in sync with FINRA’s, and promptly notify you if there is a discrepancy between your internal system and Web CRD so that you can quickly resolve.

Asking often, keeping current records, and updating Web CRD are simple concepts but implementing these critical tasks can be very difficult without some automation.


NRS has the technology solutions you need to manage the OBA process from end-to-end. Learn more about our technology solutions including ComplianceMAX and ComplianceGuardian by going here


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Continuing your Compliance Education

Is there a difference between education and continuing education? Definitions, research and opinions vary. NRS Education supports the mainstream definitions that focus on education as foundational knowledge and continuing education as an expansion on foundational knowledge as well as a vehicle to keep current on new developments within the field of investment adviser and broker-dealer compliance.

Both education and continuing education can be enriching experiences and offer compliance professionals the opportunity to maintain licenses, certifications and designations, expand skill sets, remediate learning gaps, and could even be a path to a higher-level position.

Compliance education and continuing education can also generate continual benefits to help firms strengthen compliance programs and prevent regulatory deficiencies.

The SEC provides the Compliance Outreach Program for investment advisers and investment companies[i] as well as for municipal advisers,[ii] and SEC and FINRA provide the same for broker-dealers[iii] to maintain open communication among regulators and industry professionals. These events give industry professionals an opportunity “to learn effective compliance practices,” and “to share strong compliance practices and promote the exchange of ideas to develop an effective compliance structure.”


NRS has been providing education for over 30 years and has been a provider of continuing education – as documented by NRS’s ability to maintain continual approval from several CE agencies for meeting continuing education criteria – since 1994. NRS Education develops its events to meet criteria for CLE, CPE, CFP® and IACCP® continuing education credits.

View the updated NRS Education Calendar, which lists many opportunities to gain foundational knowledge and keep you ahead of the curve on regulatory examinations, cybersecurity, artificial intelligence, ethics, new Form ADV Part 1 amendments, advertising, robo-advisers, and more.


[i] SEC Compliance Outreach Program for Investment Adviser and Investment Company Chief Compliance Officers
[ii] SEC 2017 Compliance Outreach Program for Municipal Advisers
[iii] SEC 2017 National Compliance Outreach Program for Broker-Dealers


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