For the broker dealer, there are a few things that are certain in life, and one of those happens to be Financial Industry Regulatory Authority (“FINRA”) audits. No broker dealer wants to get a FINRA examination call. However, there are multiple ways that a broker dealer can be prepared for their firm’s FINRA exam. The most important thing a broker dealer can have in place is a solid compliance program. This includes but is not limited to: Knowing where your broker dealer’s books and records are stored and how to easily access said files Being able to clearly explain your Read more about FINRA Audit Preparation[…]
Under SEC Rule 17F-2, every member of a national securities exchange, broker, dealer, registered transfer agent and registered clearing agency, and national securities association (as well as others), shall require that each of its partners, directors, officers, and employees be fingerprinted and submit appropriate and complete fingerprint cards to FINRA. FINRA then transmits these fingerprints and identifying information to the FBI to identify and process, consistent with protocols and requirements established by the Attorney General. Who is Required to be Fingerprinted? SEC Rule 17f-2 requires that the following associated persons be fingerprinted: Persons applying for registration. A fingerprint card must Read more about SEC Rule 17f-2: Fingerprinting Of Securities Industry Personnel[…]
Firms should have appropriately established controls for review, approval, and archiving of all firm related websites and related content. Firms must be able to readily produce all current and historical website content that promotes the firm or any of its covered persons. The firm should establish controls to ensure that all content is approved prior to use by a designated supervisor. Such supervisor is to have appropriate knowledge related to such content requirements. The guidelines below do not represent an exclusive list of considerations that a supervisor must make in determining whether such website complies with all applicable standards. Content Read more about Website Reviews[…]
SEC Rule 204-2 require that firms make and keep required books and records for prescribed periods, and furnish copies of such records as necessary. Examples of such records include, but are not limited to electronic communication, advertisements, trade blotters, asset and liability ledgers, income ledgers, customer account ledgers, securities records, order tickets, trade confirmations, trial balances, and communications that relate to the firm’s business. Any records that are considered to be “original records” are required to be archived appropriately. Firms that elect to use electronic storage to maintain such records may only do so if they establish policies and procedures to:
- Safeguard the records from loss, alteration, or destruction;
- Limit access to the records to authorized personnel and regulators; and
- Ensure that electronic copies of non-electronic originals are complete, true, and legible.
As a registered adviser, you must make and keep true, accurate and current certain books and records relating to your investment advisory business. Federal covered advisers registered under section 203 of the Act (15 U.S.C. 80b-3) are required by the SEC to make and keep true, accurate and current books and records relating to its investment advisory business of the following:
You get that call, and your heart drops. You knew that a regulatory exam was on the horizon, but you have put off thinking about it. Now, you are face-to-face with an upcoming FINRA examination, and the panic has set in.