Form ADV Part 2B is a brochure supplement that must contain certain information about specific individuals, acting on behalf of the investment adviser, who actually provide the investment advice and interact with the client. The brochure supplement is also a narrative format in plain English and includes six required disclosure categories, with a seventh for advisers registered or are registering with one or more state securities authorities:
The Covid-19 Pandemic has affected everyone, forcing many to work from home and causing an increase in the use of virtual environments. With it comes a rise in cyber-attacks, as hackers take advantage of the confusion and peoples lack of preparation to break into company networks, and trick people into revealing sensitive information. This blog post will discuss some of the common areas of deficiencies for firm’s cybersecurity training programs, and a few tips for improving those programs to keep your firm and employees protected.
FINRA Rule 2232 requires firms to provide retail customers with mark-up disclosure (and other related disclosures) for trades in corporate and agency debt securities that firms offset on the same day with other principal trades in the same security. Disclosed mark-ups must be calculated from a security’s Prevailing Market Price (PMP), consistent with FINRA Rule 2121 and applicable FAQ guidance. On April 24, 2020 FINRA released a very valuable FAQ on Fixed Income Mark-up Disclosure with important updates related to disclosure requirements for broker dealers. Broker dealers and their employees are braving a whole new world with various work from home and virtual meeting and operations challenges. FINRA makes updates to the FAQ’s so it is important to check back often for the most up to date information.
On October 29, 2020 FINRA released a regulatory notice detailing Rule 3241, a new rule that limits any associated person of a member firm who is registered with FINRA from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust for or on behalf of a customer. The rule requires the member firm with which the registered person is associated, upon receiving required written notice from the registered person, to review and approve or disapprove the registered person assuming such status or acting in such capacity. Rule 3241 does not apply where the customer is a member of the registered person’s “immediate family, and becomes effective February 15, 2021
Most broker-dealers are aware of their annual requirement to test and document their firm’s compliance program. But, the question remains if firms are meeting the full requirements of the rule. Below are the basics of the former NASD Rule 3012, now FINRA Rule 3120, for establishing and maintaining a system of supervisory control. Read More…
FINRA Rule 3110 provides the requirements for building and maintaining a supervisory structure that is in compliance with rules and regulations. Among other requirements, this rule addresses the documentation and supervision of supervisory personnel in 3110(b)(6). What is FINRA Rule 3110(b)(6)? Rule 3110(b)(6) requires firms to document supervisory functions and responsibilities of each registered supervisory principal. It also establishes procedures to prohibit self-supervision and situations in which the supervisory principal reports to and/or has their compensation or continued employment determined by an individual or individuals that they are supervising. Lastly, it provides a carve-out for those who are unable to Read more about Supervision of Supervisory Personnel[…]