Communications Archives - MasterCompliance

Communication Recordkeeping in the Day of the Hybrid Workforce

Posted on May 31, 2023 by SCM Communications

All broker dealers have recordkeeping obligations required by Rule 17a-4(b)(4) under the Securities Exchange Act of 1934. Among the list of required obligations is communication recordkeeping. This includes incoming as well as outgoing communications with respect to the broker dealer. Further instructions were given by the Financial Industry Regulatory Authority (“FINRA”) in FINRA 11-39 and later in FINRA 17-18. This is noted because over the course of the past years, the hybrid work environment has become the norm. With this, more and more communication software and applications have become available to the public to ease the transition between working from Read more about Communication Recordkeeping in the Day of the Hybrid Workforce[…]

This is a summary of the key findings of the SEC's charges regarding electronic communications.

Electronic and Technology Takeaways from SEC’s Billion Dollar Penalties

Posted on December 5, 2022 by SCM Communications

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 Don’t Protect the Firm What’s key about these charges is that many of the Firm’s 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[…]

FINRA’s Change to Rules 5122 and 5123

Posted on July 23, 2021July 23, 2021 by admin

On July 15, 2021, FINRA released Regulatory Notice 21-26 announcing changes to FINRA Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) effective October 1, 2021. The changes will require members to file retail communications that promote or recommend private placement offerings that are subject to those rules’ filing requirements.

Message Archiving

Posted on March 17, 2021March 23, 2021 by admin

An important component of financial compliance for broker-dealers is establishing message archiving for all communications relating to its business. Not only is it required by FINRA, but it can protect your Firm if there is an employee conducting unethical or illegal business activities. In a communication from Smarsh, a participant in FINRA’s Preferred Pricing Program, they state that “Broker-dealers can avoid being penalized by regulators for wrong doing among individual professionals if they can clearly demonstrate that they are proactively and sufficiently capturing and monitoring all electronic communications.”

COVID-19 and Fixed Income Update

Posted on March 11, 2021March 11, 2021 by admin

FINRA Rule 2232 requires firms to provide retail customers with mark-up disclosure (and other related disclosures) for trades in corporate and agency debt securities that firms offset on the same day with other principal trades in the same security. Disclosed mark-ups must be calculated from a security’s Prevailing Market Price (PMP), consistent with FINRA Rule 2121 and applicable FAQ guidance. On April 24, 2020 FINRA released a very valuable FAQ on Fixed Income Mark-up Disclosure with important updates related to disclosure requirements for broker dealers. Broker dealers and their employees are braving a whole new world with various work from home and virtual meeting and operations challenges. FINRA makes updates to the FAQ’s so it is important to check back often for the most up to date information.

FINRA’s Top Priorities for 2021

Posted on February 24, 2021February 24, 2021 by admin

Early in the year, FINRA released their 2021 Report on FINRA’s Examination and Risk Monitoring Program, which is designed to inform member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations.

In this report detailing FINRA’s top priorities for 2021, FINRA addresses 18 regulatory areas which are grouped into 4 categories: (1) Firm Operations, (2) Communications and Sales, (3) Market Integrity, and (4) Financial Management. From these 18 regulatory areas, FINRA highlights 6 that they feel are the most important and affect a large portion of member firms, which are as follows: