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…


IT’S ALMOST 2018!!!! As we approach the New Year, firms should make sure that they start off on a good note.  Below are the regulatory filings, request for comments, and certification due dates for the month of January. FINRA does not list any conferences or events for the month. JANUARY 2018 January 2nd Annual Audit[…]


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[…]

The DOL’s Fiduciary Rule Transition Period Extended 18 Months

As you may recall, the Fiduciary Rule’s BIC Exemption and Principal Transaction Exemption became applicable on June 9, 2017, with transition relief through January 1, 2018.  However, recently the Department of Labor announced the delay of the second implementation of the Fiduciary Rule, amending it from January 1, 2018 to July 1, 2019.  Due to this amendment, Financial Institutions and Advisers will only have to comply with the Impartial Conduct Standards Read More…

Regulation D Exemptions

Regulation D, established by the Securities and Exchange Commission, provides exemptions that allows companies to raise capital through the sale of unregistered securities.  Under Regulation D, companies can avoid the costs associated with a public offering.  Although companies are not required to register with the SEC under Regulation D, they are still required to provide[…]