Tag: Policies and Procedures

FINRA Audit Preparation

FINRA Audit Preparation

Posted on by SCM Communications

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[…]

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 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[…]

Key Steps for Starting a Broker-Dealer

Key Steps for Starting a Broker-Dealer

Posted on 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[…]

Notice to Members 06-23 & Your Firm’s Annual FINOP Review

Posted on by SCM Communications

Back in the early 2000’s, FINRA (then known as the NASD) came out with Notice to Members 06-23 (“Notice”). This Notice goes into detail about the responsibilities of the FINOP. Whether your FINOP is employed full-time in-house or is outsourced, the Notice applies. There are further considerations for the FINOP if the role is outsourced.

Merrill Mutual Fund Enforcement Lessons Learned

Merrill Mutual Fund Enforcement Lessons Learned

Posted on by admin

FINRA (Financial Industry Regulatory Authority) announced on June 2, 2022 that it ordered Merrill Lynch, Pierce, Fenner & Smith, Inc., to pay 15.2 million in restitution and interest to thousands of customers who purchased Class C mutual fund shares when Class A shares were available at a substantially lower cost. FINRA news releases are useful tools to look for trends in violations and other sanctions. These trends can assist you in identifying weak areas in your Firm’s compliance programs or surveillance. Below is a summary of the Merrill order, as well as key takeaways. Click here for the corresponding news Read more about Merrill Mutual Fund Enforcement Lessons Learned[…]