FINRA Releases Two Unscripted AML Podcasts

During the months of April and May 2019, FINRA introduced a new AML podcast. FINRA’s unscripted podcast explained the importance of a solid AML program, its importance to the overall industry, and best practices. Blake Snyder and Jason Foye of FINRA’s AML investigative unit were the guest speakers. What Is Unique About Money Laundering In[…]

FINRA’s Proposed Rule Change on OBAs and PSTs

In May of 2017, FINRA released a Retrospective Rule Review 17-20 requesting comments on the effectiveness and efficiency of its Rule 3270, Outside Business Activities (“OBAs”) of Registered Persons, and Rule 3280, Private Securities Transactions (“PSTs”) of an Associated Person. Then, in February of 2018, FINRA issued Regulatory Notice 18-08 seeking additional comments on a[…]

NASD Guidance On Supervisory Responsibilities

If you are a broker dealer or a supervisor at a broker dealer, I’m sure you have come across the terms Written Supervisory Procedures, Supervisory Procedures, and Compliance Systems. How many of you really know the difference, and before your eyes glaze over the rest of the article, how many of you know how to properly execute these concepts…. I’ll wait…….

Great! Now that I have your attention, there is no need to panic. The following post will walk you through the differences, some key concepts, practice pointers, and other factors you need to be aware of.

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FINRA Rule 2111: Quantitative Suitability

Welcome to the third and final part in our series on the three main suitability obligations outlined in FINRA Rule 2111 (Suitability). As with our earlier posts, “FINRA Rule 2111: Reasonable-Basis Suitability” and “FINRA Rule 2111: Customer-Specific Suitability”, we will begin with a brief overview of the three main suitability obligations imposed on broker-dealers and their associated persons; then, this particular blog will focus in on Quantitative Suitability.

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FINRA Rule 2111: Customer-Specific Suitability

This post is the second in our three-part series on the three separate and distinct suitability obligations outlined in FINRA Rule 2111 (Suitability). As with our previous post, “FINRA Rule 2111: Reasonable-Basis Suitability”, we will begin with a brief overview of the three main suitability obligations imposed on broker-dealers and their registered representatives; then, this particular blog will focus in on Customer-Specific Suitability.

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FINRA Rule 2111: Reasonable-Basis Suitability

Although suitability is a well-established principle within the securities industry, broker-dealers and their registered representatives sometimes forget that FINRA Rule 2111 (Suitability) has three separate and distinct suitability obligations. We will begin with an overview of all three main suitability obligations. Then, we will be going in-depth on these areas across three different blogs; this particular blog will focus in on Reasonable-Basis Suitability.

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Customer Identification Program (CIP): Definitions and Requirements – Part II

[Continued from Customer Identification Program (CIP): Definitions and Requirements – Part I]

How Does Risk Assessment Affect a Firm’s CIP?

Appropriate verification procedures for a CIP are governed by a risk-based assessment. A CIP must include risk-based procedures for verifying the identity of each customer to a reasonable and practicable extent. These procedures must be based on the broker-dealer’s assessment of the relevant risks, including those presented by the types of accounts maintained by the broker-dealer, the methods of opening accounts, and the types of identification information available. Additionally, this risk-based assessment should take into consideration the broker-dealer’s size, location, and customer base.

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Customer Identification Program (CIP): Definitions and Requirements – Part I

A broker-dealer must establish, document, and maintain a written Customer Identification Program (CIP) as a part of the broker-dealer’s anti-money laundering (AML) compliance program (31 CFR 1023.220) as required by FINRA Rule 3310. The CIP must be appropriate for the broker-dealer’s size and business, and it must outline the following procedures: Read More…

FINRA Rule 3310: Anti-Money Laundering Compliance Program

FINRA Rule 3310 sets forth minimum standards for the required anti-money laundering (AML) compliance programs to be implemented by broker-dealers. This written AML compliance program must be reasonably designed to achieve and monitor compliance with the requirements of The Currency and Foreign Transactions Reporting Act of 1970 (more commonly known as the “Bank Secrecy Act” or “BSA”) and with the implementing regulations declared thereunder by the U.S. Department of the Treasury. Read More…