Website Reviews

Website Reviews

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[…]

Personal Trade Reviews

Personal Trade Reviews

Citigroup Global Markets Inc. was recently censured and fined $350,000.00 ([PDF] FINRA Case #2019064316401) for failing to have a supervisory system to ensure statements were reviewed timely, as well as not ensuring they were receiving paper statements for accounts at custodians for which they did not have a direct feed. Although this particular incident was a BD fine, this information should be helpful for RIAs as well. An RIA should be conducting personal trade reviews as a part of their Code of Ethics. Considerations The review and supervision of outside brokerage accounts isn’t news; however, it’s important to take a Read more about Personal Trade Reviews[…]

Supervising Vendors

Supervising Vendors

FINRA recently released Regulatory Notice 21-29 regarding a broker-dealer’s obligation to supervise certain activities and functions of third-party vendors. This is nothing new, but we are seeing a big increase in utilizing outsourced vendors, including CRMs, Electronic Storage, Work Flow software, and IT vendors. Although the following is based on FINRA guidance for BDs, RIAs have similar responsibilities for supervising vendors, so we hope that RIA firms will glean some valuable information from this guidance as well. The level of supervision can vary depending on the vendor, access, and the critical nature of their service. Firms are encouraged to pull Read more about Supervising Vendors[…]

New York IAR Registration Waiver Deadline Reminder

New York IAR Registration Waiver Deadline Reminder

This blog is a follow up to our Change to New York IAR Registration blog, and a reminder that the August 31st deadline to submit a waiver for registration to New York is looming. Effective February 1, 2021, New York now requires Individuals to register in the state. Previously, NY has not held 65/66 licenses; however, this has changed. Note the registration standards for state-registered firms and SEC-registered firms differ. State-Registered Firms The new rule requires all investment adviser representatives with more than five clients in the state of New York to register as an investment adviser, unless exempt from Read more about New York IAR Registration Waiver Deadline Reminder[…]

FINRA’s New And Improved Fund Analyzer Tool

FINRA’s New And Improved Fund Analyzer Tool

FINRA has recently given us all a new and improved Fund Analyzer tool. With the recent emphasis on Share Class selection, Regulation Best Interest (Reg BI) for broker-dealers, and the fiduciary duty of Registered Investment Advisers. Firms are encouraged to train their staff on using this new tool.

The new analyzer allows individuals to sort through and compare more than 30,000 products and run a wide variety of investment scenarios. The tool’s enhancements enable users to better calculate how a fund’s fees, expenses, and discounts impact the value of a fund over time.

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Cybersecurity Exam Observations and Effective Practices

Cybersecurity Exam Observations and Effective Practices

Cybersecurity remains one of the principal operational risks facing broker-dealers and Registered Investment Advisers. Accordingly, FINRA and the SEC’s examiners expect firms to have reasonably designed cybersecurity programs and controls consistent with the firm business model and scale of operations to ensure that sensitive data, including client information, is not lost or misused, or accessed by unauthorized users.

Examiners continue to inquire into the Firm’s controls regarding firewalls, vulnerability, penetration testing, and training during office examinations.

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