Information for Broker-Dealers on key topics such as: broker-dealer compliance requirements, FINRA rules and regulations, starting a new broker-dealer, the broker-dealer application process (including Form CMA and Form NMA), FINOPs, and more.
As consultants, we canât emphasize enough the importance of having a proactive cyber security program that is specifically tailored to protect disruption of critical systems as well as protection of sensitive data for both the firm and its customers.
Financial Reporting for Broker Dealers. When you decide to enter the highly regulated broker dealer world, you must arrange to have the properly licensed people registered with your firm. One of those is a FINOP (Financial and Operations Principal). FINOPâs have either a Series 27 license or a Series 28 license. Your broker dealerâs FINOP is required to submit various regulatory filings to FINRA. Note that hiring a bookkeeper or a certified public accountant will not fulfill the requirement of having a licensed FINOP registered with your broker dealer. A new broker dealer, which is defined as a broker dealer Read more about Financial Reporting for Broker Dealers[…]
On September 20th, FINRA released the podcast FINRA Enforcement: Bringing Cases Against Individual Brokers. Â This podcast provides background information on how the enforcement process works against individual registered representatives. Mr. Chris Kelly, Deputy Head of Enforcement, was the guest on the show. Below is a summary of key considerations and takeaways for Firmâs and Brokers. Type of Cases Brought Against Individual Brokers Mr. Kelly noted that there are a wide range of cases brought against an individual broker. These can include failure to report an outside business activity, private securities transactions (aka selling away from the firm), fraud, excessive and Read more about FINRA Enforcement: Bringing Cases Against Individual Brokers[…]
On September 22, 2022, the Securities and Exchange Commission announced charges against 15 wall street broker-dealers and one affiliated investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications during January 2018 through September 2021 review period. You can read the commissions summary and links for all 15 orders here. Below are some of the key finding and takeaways. Attestations Alone Donât Protect the Firm  Whatâs key about these charges is that many of the Firmâs had procedures, training and even attestations in place for all Associated Persons to document and Read more about Electronic and Technology Takeaways from SEC’s Billion Dollar Penalties[…]
This is a summary of a recent FINRA podcast on Membership Application Program.
Every broker dealer has at least one thing in common â Minimum Net Capital Requirements (âMNCRâ). Whether the firm has a $5,000 MNCR or a $100,000 MNCR, the firmâs FINOP must ensure that the broker dealer is at all times (including intra-day) meeting the requirements set forth by FINRA with SEA Rule 15c3-1. The minimum net capital requirement is going to be the higher of the figure set forth by FINRA based upon the type of broker dealer the firm is OR the total of the firmâs Aggregate Indebtedness. Today, letâs specifically talk about the Aggregate Indebtedness to Net Capital Read more about Letâs Talk Aggregate Indebtedness[…]