FINRA Updates Anti-Money Laundering Template for Small Firms

Per the Bank Secrecy Act (BSA) and FINRA Rule 3310, FINRA member firms are required to establish Anti-Money Laundering (AML) compliance programs. To assist its smaller member firms with fulfilling these responsibilities, FINRA publishes the “Anti-Money Laundering Template for Small Firms”, which provides instructions, relevant rules, text examples, relevant websites, and other resources that can be used to develop an AML plan for a small firm.

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OBAs & PSTs: FINRA Seeks Comment on Proposed Rule

Last spring, FINRA began a review of its rules regarding Outside Business Activities (OBAs) and Private Securities Transactions (PSTs). The review was meant to evaluate the efficiency and efficacy of FINRA Rule 3270 (Outside Business Activities of Registered Persons) and FINRA Rule 3280 (Private Securities Transactions of an Associated Person). FINRA concluded that while Rules 3270 and 3280 are fulfilling their intended purposes, they could benefit from changes to make the rules more contemporary and present-day and to better align the goal of protecting investors with the reality of the current regulatory landscape and business practices. Based on its findings, FINRA has proposed a new rule governing OBAs and PSTs, meant to replace the current rules and reduce unnecessary burdens on member firms.

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Buy or Start a Broker-Dealer: 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…

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[…]

Change to Definition of Qualified Client

The Securities and Exchange Commission (“SEC”) recently announced an upcoming change to the definition of “qualified client” as defined in Rule 205-3 under the Investment Advisers Act of 1940 (“Advisers Act”) that will become effective August 15, 2016. This applies to any Registered Investment Adviser (“RIA” or “Investment Adviser”) that earns performance based fees.

To provide some background, Section 205(a)(1) of the Advisers Act generally prohibits an investment adviser from entering into, extending, renewing, or performing any investment advisory contract that provides for performance Read More…

Pay-to-Play: Capital Acquisition Brokers

Earlier this year, FINRA began accepting applications for firms wishing to register as Capital Acquisition Brokers.  A Capital Acquisition Broker (“CAB”) is a firm that engages in a limited range of activities.  Such activities include advising companies and private equity funds on capital raising and corporate restructuring, and acting as placement agents for sales of unregistered securities to institutional investors under limited conditions.  CABs cannot carry or maintain customer accounts, handle customers’ funds or securities, accept Read More…