Broker-Dealer Ownership Archives

The Chief Compliance Officer

Posted on June 5, 2023 by SCM Communications

As with all career choices, there are some vital pieces of information that are not included in the textbooks. Being a Chief Compliance Officer (“CCO”) is no exception to this rule. There are simply aspects of the position where life experience becomes the CCO’s guidebook. A thorough Chief Compliance Officer within a broker dealer (“BD”) is not every employee’s favorite person. Holding all employees to the strict processes and procedures set forth for the broker dealer can sometimes feel like a full-time job in itself. Being a CCO can be a thankless position, but the rewards can also be great. Read more about The Chief Compliance Officer[…]

Outsourced Compliance

Posted on May 23, 2023 by SCM Communications

Are there times when as a Financial Industry Regulatory Authority (“FINRA”) approved and registered broker dealer that you feel your broker dealer is lost in an ocean of overwhelming rules and regulations? You may feel as though your firm is drowning in a plethora of obligations and tasks. It is times like this when broker dealers can find drastic benefits of outsourcing some of its compliance functions. Having outside compliance is not a requirement of FINRA, but it is understandable given the constant stream of changes in the world of the broker dealer industry. There is a level of comfort Read more about Outsourced Compliance[…]

Becoming a Registered Broker Dealer

Posted on May 18, 2023 by SCM Communications

When a firm makes the decision to become a registered broker dealer with the Financial Industry Regulatory Authority (“FINRA”), the feelings that follow can be quite overwhelming. Unless one has much experience in the FINRA world, it can be a scary step and possibly intimidating. The mission of FINRA is to work with a broker dealer to ensure investor protection, market integrity, and confirm that the broker dealer’s practices and programs are in compliance with the industry’s rules and regulations. The FINRA institution desires that every broker dealer is successful in mitigating risk for the client and in turn becomes Read more about Becoming a Registered Broker Dealer[…]

Key Steps for Starting a Broker-Dealer

Posted on November 15, 2022 by SCM Communications

Individuals and companies desire to start a broker-dealer for many reasons including to facilitate sales, create an entry point for foreign financial institutions, or be a part of a larger financial plan. Some of the benefits to starting a broker-dealer (vs. purchasing an existing one) include saving money on due diligence, having no prior regulatory or financial issues, and the ability to customize it to fit your desired products and business lines. If you are looking for more pros and cons to starting vs. Buying a broker-dealer, read one of our recent posts on the topic “here”. If you decide Read more about Key Steps for Starting a Broker-Dealer[…]

1017 Change in Membership Review

Posted on October 22, 2021 by admin

In our 1017 Change in Membership blog we discussed events that would be considered a change in membership that trigger the requirements of FINRA Rule 1017. In this blog we will go over some key areas that firms should cover when reviewing to see if they trigger the application requirements under Rule 1017. Part 1: Changes in Business Lines or Product Offerings The reviewer is to inspect the Firm’s current membership agreement and verify its approved business lines. The reviewer considers other present or future business lines not contained in its membership agreement. Firms are not to engage in any Read more about 1017 Change in Membership Review[…]

1017 Material Change Determination

Posted on October 15, 2021 by admin

When a member intends to add a line of business, FINRA has shown that this type of expansion is often a significant event that impacts the firm’s supervisory and compliance infrastructure, personnel, and finances. When such an impact occurs, FINRA staff is required to verify that the member continues to meet each of the membership criteria identified in Rule 1014. However, FINRA recognizes that any proposed new business line’s characterization as a “material change in business operations” ultimately depends on assessing all relevant facts and circumstances. Certain proposed new business lines, such as market-making, underwriting, and acting as a dealer Read more about 1017 Material Change Determination[…]