Annual Certification

Annual Certification of Compliance Processes

FINRA Rule 3130 serves as an annual requirement to focus on the firm’s overall compliance programs through purposeful interaction between executive members and compliance officers. You might be wondering how firms ensure compliance with this rule. In this blog, we will address some frequently asked questions related to the annual certification requirement and the surrounding process.

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April Disciplinary Actions

Disciplinary Actions by FINRA: April 2020

FINRA publishes a monthly review of disciplinary actions taken against both firms and individuals. These disciplinary actions 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 list of a few key actions from last month.

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Supervision

Supervision Relief Related to COVID-19 Pandemic

FINRA Rule 3110 Supervision requires a firm to establish and maintain a system to supervise the activities of its associated persons. Furthermore, the supervisory process seeks to achieve compliance with the applicable securities laws and regulations and FINRA rules.

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Teleworking

Teleworking Considerations During COVID-19 Pandemic

Many financial service institutions have been hesitant to create teleworking processes and systems that would give them more flexibility to service clients and build the business. However, within the regulatory framework, landmines appear at every turn.

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Annual Compliance

Annual Compliance Requirements: Year-End Priorities

It’s that time of the year again! As the fourth quarter ticks by, we have compiled a helpful end of year to-do list to aid small broker-dealers in addressing and closing out important annual compliance requirements.

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Compliance

Compliance, Supervision, and Disclosures

Beginning in 2017, the United States Security and Exchange Commission (“SEC”) initiated a series of examinations aimed at compliance policies and procedures regarding individuals within these firms that had a prior disciplinary history.

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Supervisory

Supervisory Responsibilities – NASD Guidance

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 3110: Supervision

Last month, Stephens Inc. was censured by FINRA and fined $900,000 for failing to properly supervise “flash” emails sent by its research department.  According to FINRA Rule 3110, firms must have supervisory procedures established which include procedures for the review of incoming and outgoing written (including electronic) correspondence and internal communications relating to the member’s investment banking or securities business. The issue began when Stephens Inc.’s research analysts sent flash emails to the sales and trading personnel.  Although the research analysts sent the flash emails internally, the lack of supervision created the risk that material non-public information may have been included in the emails which could lead to misuse by the sales and trading personnel.

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