Blog | MasterCompliance

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....

Financial Industry Regulatory Authority (“FINRA”) provides an OFAC search tool that many industry member firm’s use as part of their onboarding process for risk-based background reviews. As of January 3, 2023, FINRA’s OFAC search tool will be retired. We recommend that you notify all staff that normally do OFAC checks for your Firm so they can become familiar with the OFAC tool available through the United States Department of Treasury. What is OFAC? The Office of Foreign Assets Control (OFAC) is the government agency that maintains the OFAC list. The OFAC list is a publicly available list and is made Read More....

On September 20th, FINRA released the podcast FINRA Enforcement: Bringing Cases Against Individual Brokers.  This podcast provides background information on how the enforcement process works against individual registered representatives. Mr. Chris Kelly, Deputy Head of Enforcement, was the guest on the show. Below is a summary of key considerations and takeaways for Firm’s and Brokers. Type of Cases Brought Against Individual Brokers Mr. Kelly noted that there are a wide range of cases brought against an individual broker. These can include failure to report an outside business activity, private securities transactions (aka selling away from the firm), fraud, excessive and Read More....

On September 22, 2022, the Securities and Exchange Commission announced charges against 15 wall street broker-dealers and one affiliated investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications during January 2018 through September 2021 review period. You can read the commissions summary and links for all 15 orders here. Below are some of the key finding and takeaways.  Attestations Alone Don’t Protect the Firm   What’s key about these charges is that many of the Firm’s had procedures, training and even attestations in place for all Associated Persons to document and Read More....

On November 1st, FINRA released a podcast Membership Application Program: Reviewing and Approving Digital Asset Firms. This podcast provides background information on the application process for broker-dealers requesting approval for certain digital asset activities through FINRA’s MAP department for new member applications and changes to membership. Approximately two dozen firms have been approved by FINRA to provide services and securities backed by digital assets, and more firms are requesting the same. Mr. Armando Valdes, an application manager with FINRA’s Membership Application Program (MAP), and David Aman, a senior advisor with the Office of Financial and Operational Risk Policy within the Read More....