Buy or Start a Broker-Dealer: The Weighing the Two Options

Are you looking to start a broker-dealer or buy a broker-dealer? If so, we can assist you in weighing the two options.  Securities Compliance Management, Inc., also doing business as MasterCompliance, is a full-service compliance consulting firm.  We have assisted many clients in starting and buying a broker-dealer.  There are many factors that you should consider before deciding which option is the best for you.   Read More…

What is Custody?

Custody remains a focus area for SEC and state regulators alike.  Firms should review the guidance released by the SEC to learn what steps can be taken to avoid having inadvertent custody requiring an independent surprise examination.

Guidance Issued by the SEC: Inadvertent Contractual Custody

In guidance notice No. 2017-01, “Inadvertent Custody: Advisory Contract Versus Custodial Contract Authority,” the SEC lists examples of problematic statements listed in agreements between clients and qualified custodians.  The staff has determined an investment adviser may inadvertently have custody of client funds or securities because of provisions in a separate custodial Read More…

What is Form U5?

Upon terminating a registered representative or an investment advisor from a firm, whether voluntary or involuntary, a Form U5 must be filed. The Form U5 is the Uniform Termination Notice for Securities Industry Regulations. It can be filed electronically with the Central Registration Depository (“CRD”) or the Investment Adviser Registration Depository (“IARD”).  Firms can also submit paper filings.  Once filed, the individual’s registration will be terminated in the appropriate jurisdictions and/or self-regulatory organizations. Read More…

FINRA’S EXAMINATION FINDINGS

Recently, the Financial Industry Regulatory Authority (“FINRA”) released a report detailing its observations from its cycle examination program.  FINRA hopes the report will assist broker-dealers in strengthening their compliance with securities rules and regulations.  FINRA noted that the report does not represent a complete inventory of observations about the industry as a whole, does not imply that any issues discussed exist at any particular firms, and should not be read as creating new legal or regulatory requirements or new interpretations of existing Read More…

FINRA Rule 2210 and Social Networking Websites

FINRA Rule 2210 requires that firms retain records of communications that relate to their “business as such” under Rule 17a-4(b) of the Securities Exchange Act of 1934 (SEA).  Therefore, it is the content of the broker’s communication that determines whether it is regulated under Rule 2210.   However, how does the rule apply if the firm[…]