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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2019 FINRA Renewal Program for BDs and RIAs

The 2019 FINRA Renewal Program for Broker-Dealers, Investment Adviser Firms, Investment Adviser Agents, Investment Adviser Representatives, and Branches is scheduled to begin on November 12, 2018.

Firms should note the following key dates in the renewal process:

  • November 12, 2018 – Preliminary statements are available via the E-Bill section of WebCRD. Preliminary statements are not mailed to firms.
  • December 17, 2018 – Full payment of Preliminary Statements is due.
  • January 2, 2019 – Final Statements are available via the E-Bill section of WebCRD.
  • January 21, 2019 – Full Payment of Final Statements is due.

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Guidance on Third-Party Recordkeeping Services and SEA Rule 17a-4

As you may remember from our earlier post on the subject, under SEA Rules 17a-3 and 17a-4, a broker-dealer is required to make and keep books and records relating to its business and may maintain and preserve records by means of “electronic storage media.” The Securities and Exchange Commission (SEC) recently released guidance in response to a letter received from FINRA regarding contractual arrangements between broker-dealers and third-party recordkeeping service providers – more specifically, contractual arrangements that include provisions permitting the third-party recordkeeping service providers to delete or discard the broker-dealer’s records, typically due to non-payment by the broker-dealer of fees due under the contract.  FINRA recapped the guidance received from the SEC in its Regulatory Notice 18-31.

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Customer Identification Program (CIP): Common Questions – Part I

In our previous post on customer identification programs, “Customer Identification Program (CIP): Definitions and Requirements,” we defined “account” and “customer” and went over the minimum requirements for CIP procedures and verification, including touching on non-documentary means of identity verification. This post will get a little more specific, addressing common questions firms have when developing and implementing their customer identification programs. Read More…