Blog | MasterCompliance

Running a broker-dealer is not an easy task.  Firms must remain in compliance with many securities laws, rules, and regulations issued by the SEC, FINRA, or MSRB or risk getting fined, or even worse, shut down.  Firms should not take short cuts when it comes to investing in their compliance department. The compliance department should stay on top of securities regulations so that it can ensure that the firm remains in compliance.  Like any business, broker-dealers evolve and begin new business ventures.  However, unlike most businesses, broker-dealers aren’t left with the decision to ultimately decide for themselves what business they Read More....

While reviewing documents related to a private placement engagement, you may see references to Regulation D (sometimes referred to as “Reg. D”). Regulation D consists of three SEC rules – Rules 504, 505, and 506 – that issuers often rely on to sell securities in unregistered offerings. Each rule has specific requirements that the issuer must meet. SEC Rule 504, for example, provides an exemption from the registration requirements of the federal securities laws. Under Rule 504, some companies may be exempt from the normal registration requirements when they offer and sell up to $1 million of their securities in Read More....

The CFTC and the SEC are jointly issuing final rules and guidelines to require certain regulated entities to establish programs to address risks of identity theft. These rules and guidelines implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which amended the Fair Credit Reporting Act (“FCRA”). First, the rules require financial institutions and creditors to develop and implement a written identity theft prevention program (“Program”) designed to detect, prevent, and mitigate identity theft in connection with certain existing accounts or the opening of new accounts. The rules include guidelines to assist entities in the formulation and Read More....

Registered representatives have increasingly inquired about the application of certain MSRB rules to managed accounts in which a RIA is exercising discretion to buy and sell municipal securities on behalf of the account holder. Specifically, with respect to these transactions, they are expected to: Provide the time-of-trade disclosures required by MSRB Rule G-47 to the ultimate investor, who is the account holder (i.e., the RIA’s client), particularly if the dealer does not know the identity of the investor; and Obtain a customer affirmation from such an investor for purposes of qualifying the person, separately, as a SMMP under MSRB Rule Read More....

FINRA has put out a schedule for its member broker-dealers with the due dates for report filings that are due in 2017 or in the first quarter of 2018. This notice serves as a reminder to help FINRA and SEC registered broker-dealers stay compliant by filing reports on or before their required due dates. Late filings can result in fees and in suspension of FINRA membership. Annual Audit Reports Like all report filings submitted to FINRA, the annual audit report is to be filed electronically. Additionally, member firms must file the report at the regional office of the SEC in Read More....

On June 8, 2016, FINRA published a News Release to announce that it had fined Oppenheimer & Co. Inc. (“Oppenheimer”) $2.25 million for failing to reasonably supervise transactions in nontraditional exchange-traded funds (“ETFs”). Through this disciplinary action, FINRA has made its expectations abundantly clear: A broker-dealer offering nontraditional ETFs must establish, maintain, and enforce an effective system for supervising transactions in these complex products. In this blog post, we identify what Oppenheimer did wrong so that your firm does not make the same mistakes. We then describe how your firm can use “suitability guidelines” to mitigate the risk of unsuitable Read More....