Supervision Archives - Page 3 of 5

Cybersecurity Training for Employees

Posted on March 11, 2021 by admin

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.

COVID-19 and Fixed Income Update

Posted on March 11, 2021March 11, 2021 by admin

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.

FINRA Rule 3241: Registered Person as Customer’s Beneficiary

Posted on February 10, 2021 by admin

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

Supervisory Control: The Basics of Rule 3120

Posted on October 30, 2020October 30, 2020 by SCM Communications

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…

Supervision of Supervisory Personnel

Posted on October 28, 2020October 28, 2020 by SCM Communications

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[…]

AML and Branch Audits in the Time of COVID-19

Posted on October 1, 2020 by SCM Communications

At the beginning of the year, FINRA released important updates related to supervision requirements for broker-dealers. As broker-dealers and their employees started experiencing various work-from-home, virtual meeting, and operations challenges, FINRA provided valuable guidance for the transition in a FAQ related to the coronavirus pandemic. Below are a few items where FINRA has provided areas of relief related to AML and Branch audits. AML Independent Testing FINRA Rule 3310, Anti-Money Laundering (“AML”) Compliance Program, requires firms to perform independent testing of their AML program every calendar year. If a member firm neither executes transactions for customers, holds customer accounts, nor Read more about AML and Branch Audits in the Time of COVID-19[…]