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Are there times when as a Financial Industry Regulatory Authority (“FINRA”) approved and registered broker dealer that you feel your broker dealer is lost in an ocean of overwhelming rules and regulations? You may feel as though your firm is drowning in a plethora of obligations and tasks. It is times like this when broker dealers can find drastic benefits of outsourcing some of its compliance functions. Having outside compliance is not a requirement of FINRA, but it is understandable given the constant stream of changes in the world of the broker dealer industry. There is a level of comfort Read More.... -
When a firm makes the decision to become a registered broker dealer with the Financial Industry Regulatory Authority (“FINRA”), the feelings that follow can be quite overwhelming. Unless one has much experience in the FINRA world, it can be a scary step and possibly intimidating. The mission of FINRA is to work with a broker dealer to ensure investor protection, market integrity, and confirm that the broker dealer’s practices and programs are in compliance with the industry’s rules and regulations. The FINRA institution desires that every broker dealer is successful in mitigating risk for the client and in turn becomes Read More.... -
Broker Dealers are faced with a number of demanding rules and regulations in the financial industry today. One of those rules, which falls under the USA Patriot Act, requires the broker dealer to report suspicious customer behaviors in order to prevent terrorism-related money laundering. This is referred to as the Customer Identification Program (CIP). Following the CIP requirement to obtain, verify and record the identity of a person or entity is an integral part of knowing your client. These CIP procedures will also need to be written and addressed before your broker dealer’s annual anti-money laundering audit to ensure the Read More.... -
When a broker dealer hears the words “annual audit season”, it can feel like the initial effects of hay fever or pollen season hitting you smack in the face. It is not fun. You may break out in sweats, have night terrors, or worse yet, not have a great understanding of the necessity of an annual audit. Two of the most important aspects of annual audit season are as follows: having a great financial bookkeeper and having communicative Financial Operations Principal (FINOP). With these two professionals in your corner, your broker dealer should be able to rest easy during this Read More.... -
Cyber Security As consultants, we can’t emphasize enough the importance of having a proactive cyber security program that is specifically tailored to protect disruption of critical systems as well as protection of sensitive data for both the firm and its customers. Of course, any worthy program should include policies and procedures that assess, analyze, and establish risk-based controls; however, equally important, is oversight and execution of the program by a competent team of individuals that regularly monitor the performance of the program. Cyber security is complex and cyberthreats are constantly evolving. Therefore, a substantial challenge that many firms face is Read More.... -
Financial Reporting for Broker Dealers. When you decide to enter the highly regulated broker dealer world, you must arrange to have the properly licensed people registered with your firm. One of those is a FINOP (Financial and Operations Principal). FINOP’s have either a Series 27 license or a Series 28 license. Your broker dealer’s FINOP is required to submit various regulatory filings to FINRA. Note that hiring a bookkeeper or a certified public accountant will not fulfill the requirement of having a licensed FINOP registered with your broker dealer. A new broker dealer, which is defined as a broker dealer Read More....
