PTE and IRA Rollover Recommendation Considerations

PTE and IRA Rollover Recommendation Considerations

U.S. Department of Labor’s (“DOL”) recently published final prohibited transaction exemption regarding investment advice for IRA and ERISA plans (PTE 2020-02). This exemption became effective on February 16, 2021 allowing for a transition period to comply. Key elements include, written acknowledgments of fiduciary status by both the broker-dealer and the representative, disclosure of conflicts of interest and compensation information, the implementation of policies and procedures to mitigate or eliminate conflicts, as well as an annual reporting and certification of compliance. PTE’s conditions related to rollover recommendations went into effect on July 1st 2022. As we have worked with clients on Read more about PTE and IRA Rollover Recommendation Considerations[…]

Regulatory Notice 22-18: Forgery and Falsification

Regulatory Notice 22-18: Forgery and Falsification

Regulatory Notice 22-18  reminds firms of their rule obligation related to forgery and falsification of records and provides Firm’s with some specific examples that they have encountered from other Firms. These examples are great tools to review against your program and audit to ensure that your Firm is meeting rule requirements. What is Forgery or Falsification of a Record? Forgery occurs when one person signs or affixes, or causes to be signed or affixed, another person’s name or initials on a document without the other person’s prior permission. Falsification occurs when a person creates a document or entry in a Read more about Regulatory Notice 22-18: Forgery and Falsification[…]

Private Placement Best Practices from FINRA Disciplinary Actions

Private Placement Best Practices from FINRA Disciplinary Actions

FINRA (Financial Industry Regulatory Authority) publishes a monthly review of disciplinary actions taken against both firms and individuals. These disciplinary actions are useful tools to look for trends in violations and other sanctions. These trends can assist you in identifying weak areas in your Firm’s compliance programs or surveillance. Below is a list of a few recent actions related to unregistered offerings or private placements including links to learn more about each as well as key takeaways. Due diligence obligations in connection with private offerings- Torch Securities In summary, Torch Securities failed to establish and maintain WSPs reasonably designed to Read more about Private Placement Best Practices from FINRA Disciplinary Actions[…]

FINRA Rules 2165 and 4512

FINRA Unscripted Podcast: FINRA Rules 2165 and 4512

In May, FINRA released a podcast The Essential Senior Investor Protection Tools: FINRA Rules 2165 and 4512. This podcast provides a great update on the background of FINRA rules 4512 and 2165 and examples of their effectiveness over a short time frame of implementation. Two members of FINRA’s general counsel who support FINRA on the policy making side were the guests on the show. A few highlights from the podcast: FINRA Rule 2165 FINRA Rule 2165 allows a broker-dealer to place a temporary hold on a disbursement of funds or a transaction if there’s a reasonable suspicion of financial exploitation Read more about FINRA Unscripted Podcast: FINRA Rules 2165 and 4512[…]

Options Disclosure Document Update

Options Disclosure Document Update

This is a reminder for broker-dealers who provide options services to their clients, that certain disclosure documents are required including the options disclosure document (“ODD”). In May 2022, FINRA provided an information notice to update firms on the options clearing corporation (“OCC”) disclosure document issued in March 2022. Under rule 9b-1 of the Securities Exchange Act broker-dealers are required to deliver the ODD and supplements to customers. FINRA has similar requirements in FINRA Rule 2360(b)(11)(A)(1), which, among other things, requires firms to deliver the current ODD to each customer at or before the time the customer is approved to trade Read more about Options Disclosure Document Update[…]

FINRA Unscripted Podcast: Regulation Best Interest and Form CRS Two Years In

FINRA Unscripted Podcast: Regulation Best Interest and Form CRS Two Years In

FINRA recently released a podcast Regulation Best Interest and Form CRS: Two Years In. This podcast provides a great update on the current Regulation Best Interest and Form CRS trends and best practices as well as common problem areas and effective practices to compliance. A few highlights from the podcast: Regulation Best Interest vs. Form CRS Reg BI applies to any retail firm or any firm with retail customers where recommendations are being made whereas Form CRS applies to any Firm that has retail investors including Firms that offer solely self-directed business. The podcast notes that there is no de Read more about FINRA Unscripted Podcast: Regulation Best Interest and Form CRS Two Years In[…]