Compliance Risk Concepts Blog

Annual Broker-Dealer Regulatory Review and Outlook (2017)

As 2017 ends and 2018 emerges on the regulatory horizon, we find ourselves in a position to look back on what has transpired over the course of the past year in an effort to anticipate what the New Year may bring for Broker-Dealers.

In the following Annual Broker-Dealer Regulatory Review and Outlook (2017), Kaitlyn Gibbs offers her perspective on what the highlights were in 2017, as well as what will be at the center of regulatory development in 2018.

Download Annual Broker-Dealer Regulatory Review and Outlook (2017)

To download your complimentary copy of the Annual Broker-Dealer Regulatory Review and Outlook (2017), use the form below:
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The post Annual Broker-Dealer Regulatory Review and Outlook (2017) appeared first on CRC.

Broker-Dealers: Let’s Talk Turkey – Don’t Get “Carved” Up By Year End Requirements

As we approach the Thanksgiving Holiday, the end of 2017 will be here before we know it! As former Chief Compliance Officers, CRC completely understands year-end pressures for FINRA registered broker-dealers and the need/importance of executing and completing mandatory annual Compliance requirements.

Over the last several years, we’ve helped many Broker-Dealers complete each of the discrete tasks identified below. Additionally, we have helped many broker-dealers through their cycle exams in 2017 and have a very clear understanding of FINRA’s hot-button items, which continue to include cyber-security, Outside Business Activity, and Business Resiliency.

Increasingly, more and more firms are turning to external third parties to conduct year-end reviews. It eliminates the appearance and perception of potential conflicts of interest – as firm’s remove the individuals that are responsible for the execution of the programs throughout the year from the actual testing being done – creating a truly independent review of the state of play within an organization.

Based on the above, CRC provides our clients with a cost-effective approach to execute any / all of the requirements below. We remove the “pricing barrier” – by providing “modular” approaches that enable our clients to truly benefit from our significant knowledge base and expertise.

• FINRA 3120 / 3130 Annual Testing of Supervisory Controls / CEO Certification

Annually, FINRA member broker-dealers are required to test and verify the adequacy of their supervisory program, and the CEOs are required to certify their awareness of the program’s state.

As part of the annual review, firms should identify and discuss the impact of “hot topic” industry issues on their respective organizations. For instance, Outside Business Activity/Private Securities Transactions is an area that firms’ should consider assessing as part of their 2017 Annual Testing Program.

In 2017, we continue to see FINRA focus on firms’ obligations concerning their registered representatives’ outside business activities and private securities transactions. Firms must evaluate and test internal procedures to review registered persons’ written notifications of proposed outside business activities, including firms’ consideration of whether the proposed outside business activities may compromise a registered person’s responsibilities to the firm’s clients or be viewed as part of the firm’s business. FINRA is also focused on firms’ procedures for handling associated persons’ notifications of proposed private securities transactions and firms’ ongoing supervision over associated persons’ approved private securities transactions for compensation.

The annual review may offer a practical way for firms’ to assess this discrete risk – as part of their overall assessment of the state of compliance and supervision within their respective organizations.

• SEC Rule 17a-5 – Annual Compliance Report

SEC Rule 17a-5 requires broker-dealers that did not claim exemption from Rule 15c3-3 throughout the most recent fiscal year to prepare and file an annual report on compliance, and internal control over compliance, with certain financial responsibility rules (“FRRs”), specifically the Net Capital Rule (Rule 15c3-1), Customer Protection Rule (Rule 15c3-3), Quarterly Security Count Rule (Rule 17a-13), and Account Statement Rules.

The compliance report must include statements as to whether:

  1. The broker-dealer has established and maintained internal control over compliance
  2. The internal control over compliance of the broker-dealer was effective during the most recent fiscal year
  3. The internal control over compliance of the broker-dealer was effective as of the end of the most recent fiscal year
  4. The broker-dealer was in compliance with Rule 15c3-1 and paragraph (e) of Rule 15c3-3 as of the end of the most recent fiscal year
  5. The information the broker-dealer used to state whether it was in compliance with Rule 15c3-1 and paragraph (e) of Rule 15c3-3 was derived from the books and records of the broker-dealer

Impacted Broker-Dealers will also be required to engage their independent registered public accountant to examine the broker-dealer’s statements (2) through (5), above, in its compliance report.
Following PCAOB standards, the independent registered public accountant would issue a report based on that examination.

• Independent Anti-Money Laundering (“AML”) Test / Review:

Every broker-dealer is required to perform an annual review of their Anti-Money Laundering Compliance Program (“AMLCP”). This review must be undertaken by a qualified individual that has a strong working knowledge of the Bank Secrecy Act (“BSA”).

The review can be performed by an outside consultant or someone employed by the firm. However, it cannot be performed by the Anti-Money Laundering Compliance Officer (“AMLCO”) or someone that reports to the AMLCO.

As an FYI – FINRA allows firms that do not have any customers/customer accounts to perform this review once every two years.

• Written Supervisory Procedures (“WSPs”) Review

As part of its responsibilities under FINRA Rule 3012, a Firm must ensure that all business areas and new regulatory requirements are sufficiently addressed in its annual review of WSPs.

• Continuing Education

All FINRA member firms must complete their Firm and Regulatory Element Continuing Education obligations by year-end.

• Branch Office Reviews

FINRA member firms must perform inspections of all offices of supervisory jurisdiction (“OSJs”) and branch offices that supervise one or more non-branch locations on an annual basis. Each branch office that does not supervise non-branch locations must be inspected at least once every three years.

• Annual Compliance Meeting

All FINRA member firms are required to complete an annual compliance meeting (“ACM”). Although all registered representatives and principals are required to be present, an interactive internet-based “ACM on Demand” approach is acceptable in most circumstances.

• Registrations and Renewals

Broker-Dealers have until December 18th, 2017 to pay their Preliminary Renewal Account. Failure to pay by the deadline may endanger a firm’s ability to do business in jurisdictions in which it has previously done business. Although there are a number of ways to pay, firms need to ensure that there are sufficient funds in their CRD Daily Account.

HOW CAN CRC HELP?

An independent review conducted by longstanding industry professionals, reconciling your current “state of compliance” is the most effective way to ascertain your program’s status and ensure your firm continues to meet its ongoing regulatory requirements. A great deal of regulatory intelligence is required to demonstrate an organization’s understanding of its regulatory obligations (both existing and newly enacted).

At CRC, we strive to do more than perform a “check the box” review – we strive to partner. Our team of former Chief Compliance Officers (“CCOs”) and Regulators not only provide key insights into what is required of your firm but assist your firm by executing seamlessly, helping to build a stronger program- one that your management team and regulators can have confidence in.

Please contact us for help on any of the items identified above / or for a full review/assessment of your broker-dealer’s compliance and supervisory system.
Let CRC help you turn your risk into reward.

The post Broker-Dealers: Let’s Talk Turkey – Don’t Get “Carved” Up By Year End Requirements appeared first on CRC.

Phocion Helps Open Door To GIPS® Verification Services At CRC

Through our strategic agreement with Phocion Investment Services (Phocion), Compliance Risk Concepts ‎(CRC) is proud to offer GIPS® Verification Services to existing and prospective clients.

The intention of GIPS® Verification is to provide existing and prospective clients with additional credibility that the investment firm adheres to industry best performance practices. GIPS® is formulated and maintained under the guise of the CFA Institute. Its collection of requirements when properly implemented ensures that operations and published returns are highly comparable among adherents. According to GIPS®, investment firms are allowed to self-verify. Greater confidence can be achieved when performed by an independent, third party that fully understands the niche discipline of performance. Firms that follow GIPS® benefit from the following:

  • Symbolism adds integrity to the firm (Being GIPS Compliant is attractive to potential clients/investors)
  • Improve knowledge of performance measurement team
  • Enhanced quality of performance marketing in presentations
  • Added rigor to internal performance processes
  • Ensures fair and full disclosure of investment performance‎
  • Being GIPS Compliant is attractive to potential clients/investors

Phocion Founder, Ioannis Segounis, stated: “Investment firms that claim adherence to GIPS® standards must be verified on an annual basis. Greater confidence can be achieved when performed by an independent, third-party that fully understands the niche discipline of performance. When properly implemented GIPS® requirements ensure that operations and published returns are highly comparable among adopters.”

Clients wishing to obtain more information about Phocion’s GIPS® Verification services should contact CRC at +1-(917) 281-2325.

About Phocion Investment Services

Phocion Investment Services provides the expertise, independence, and sophisticated tools that enable our clients to meet their performance, compliance and due diligence objectives. Our objective is to bring clarity to the complexities of the investment industry and to assist stakeholders in their investment decision processes. With our team’s proven track record and the firm’s core pillars of honesty, accountability, and excellence in service, we are the industry’s trusted partner in the investment process. www.phocioninvestments.com

The post Phocion Helps Open Door To GIPS® Verification Services At CRC appeared first on CRC.

Documenting Effective Onboarding Due Diligence [webinar]

As noted in the 2017 Regulatory and Examination Priorities Letter, FINRA will review firms’ supervisory procedures for hiring or retaining statutorily disqualified and recidivist brokers. FINRA will examine firms’ due diligence on these individuals, which will include determining whether, as part of the verification process, a firm or third-party service provider conducts a national search of reasonably available public records to verify the accuracy and completeness of the information contained in an applicant’s Form U4. FINRA will also continue to monitor for timely submission of disclosures required on Forms U4 and U5.

Efficient onboarding of new registered representatives is critical for broker-dealers. Yet many firms continue to rely on paper-based manual processes and redundant data entry, requiring constant intervention in the process and negatively impacting rep satisfaction. Join RegED and Compliance Risk Concepts, for an hour-long webinar offering insights into the ways that technology can enable firms to eliminate inefficiencies in the onboarding process.

Date: Thursday, November 2, 2017
Time: 3:00 – 4:00 PM EDT

Presented by:

Ann Robinson, Senior VP, Business Development RegED, Inc.
Mitch Avnet, Managing Partner Compliance Risk Concepts

The post Documenting Effective Onboarding Due Diligence [webinar] appeared first on CRC.

Lowering Your Cost Of Compliance


With regulatory aggressiveness at historically high levels. Financial institutions must rethink how they thread the compliance needle and reshape the endless regulatory noise into coherent action that promotes dynamic and impactful risk management processes. At Compliance Risk Concepts, we know that your business doesn’t benefit from compliance advice that’s academic or theoretical. Unlike traditional compliance consultants, CRC’s principal advisors all have deep front-office capital markets roots that consistently guide the solutions they prescribe.

The markets are risky enough, let CRC manage your regulatory risk. Contact us for more information on how CRC can help lower your cost of compliance.

The post Lowering Your Cost Of Compliance appeared first on CRC.

ADV Regulatory Changes For Investment Advisers

On October 1, 2017, regulatory changes go into effect for investment advisers. The amended Form ADV will require investment advisers to expand the information they report on Form ADV about separately managed accounts and other important aspects of their advisory business. The SEC also adopted a number of other amendments to the Form ADV and certain rules under the Investment Advisers Act of 1940 that include permitting consolidated investment adviser registrations for certain private fund advisers that operate a single advisory business through multiple entities, amending the Advisers Act books and records rule to require investment advisers to maintain additional information supporting performance claims, and making certain other clarifying and technical amendments to the Form ADV and Advisers Act rules.

Investment advisers are not required to revise and file their Form ADV on that date solely to reflect the changes. Instead, an investment adviser will be required to use the new Form, and provide all of the newly requested information, in any initial filing or amendment of its Form on or after October 1, 2017. As a practical matter, investment advisers will generally not use the new Form until filing their next annual updating amendments (January 1, 2018 and April 2, 2018 (March 31, 2018 is a Saturday) or until they are filing an other-than-annual amendment due to material changes.

Compliance Risk Concepts suggest that investment advisers review the new requirements in detail to ensure that if an earlier amendment must be made, the required information can be gathered in a timely manner.

Highlights of the Form changes and material changes that would require filing an other-than-annual amendment are outlined below. In addition, a PDF version of the new Form ADV can be downloaded by clicking here. This highlights in yellow, section by section and question by question the changes that were made to the ADV. Those changes are indicated in the color red.

CLICK TO VIEW & DOWNLOAD

As always, Compliance Risk Concepts is available to answer any questions regarding these changes or assist your firm with the completion of the amended Form.

Highlights of the amendments to Form ADV include the following: 

  • Umbrella Registration for Private Fund Managers: The revised Form includes instructions and a new schedule (Schedule R) for the reporting of relying advisers.
  • Separately Managed Accounts: The revised Form requires disclosure regarding separately managed accounts.  Separately managed accounts are those advisory accounts over which an investment adviser has continuous and regular supervisory authority (and therefore that count towards “regulatory assets under management”) that are not pooled investment vehicles.
  • Other: The revised Form also now requires new or additional information regarding (among others):
    • the breakdown of “regulatory assets under management” among categories of clients;
    • accounts on social media platforms (including, but not limited to, Twitter, Facebook and LinkedIn);
    • branch offices;
    • parallel managed accounts; and
    • outsourced chief compliance officers.

Books and Records Rule Amendments (Look out for an additional memo regarding this rule change)

The amendments to the books and records rule will now require registered investment advisers to maintain the following:

  • the records listed in SEC Rule 204-2(a)(16) supporting performance claims in communications that the investment adviser circulates or distributes, directly or indirectly, to any person (as opposed to the current rule, which only applies to communications which are distributed to ten or more persons); and
  • originals of all written communications received and copies of written communications sent by an investment adviser relating to the performance or rate of return of any or all managed accounts or securities recommendations.

The amendments to the books and records rule will apply to any communication circulated or distributed on or after October 1, 2017.

Material Changes:

If you are registered with the SEC or a state securities authority, you must amend your Form ADV, including corresponding sections of Schedules A, B, C, and D, by filing additional amendments (other-than-annual amendments) promptly if:

  • information you provided in response to Items 1, 3, 9 (except 9.A.(2), 9.B.(2), 9.E., and 9.F.), or 11 of Part 1A or Items 1, 2.A. through 2.F., or 2.I. of Part 1B becomes inaccurate in any way;
  • information you provided in response to Items 4, 8, or 10 of Part 1A or Item 2.G. of Part 1B becomes materially inaccurate; or
  • information you provided in your brochure becomes materially inaccurate (see note below for exceptions)

Notes:

Part 1: If you are submitting an other-than-annual amendment, you are not required to update your responses to Items 2, 5, 6, 7, 9.A.(2), 9.B.(2), 9.E., 9.F., or 12 of Part 1A or Items 2.H. or 2.J. of Part 1B even if your responses to those items have become inaccurate.

Part 2: You must amend your brochure supplements (see Form ADV, Part 2B) promptly if any information in them becomes materially inaccurate. If you are submitting an other-than-annual amendment to your brochure, you are not required to update your summary of material changes as required by Item 2. You are not required to update your brochure between annual amendments solely because the amount of client assets you manage has changed or because your fee schedule has changed. However, if you are updating your brochure for a separate reason in between annual amendments, and the amount of client assets you manage listed in response to Item 4.E or your fee schedule listed in response to Item 5.A has become materially inaccurate, you should update that item(s) as part of the interim amendment.

• If you are an SEC-registered adviser, you are required to file your brochure amendments electronically through IARD. You are not required to file amendments to your brochure supplements with the SEC, but you must maintain a copy of them in your files.

• If you are a state-registered adviser, you are required to file your brochure amendments and brochure supplement amendments with the appropriate state securities authorities through IARD.

The post ADV Regulatory Changes For Investment Advisers appeared first on CRC.

Compliance Risk Concepts and NexTier Consulting Solutions Team Up To Serve Investment Management Community

NEW YORK (NEW YORK) | CHICAGO (ILLINOIS) Compliance Risk Concepts (“CRC”), a top-tier compliance consulting services firm, and NexTier Consulting Solutions (“NexTier”), a leading risk management consulting services firm are pleased to announce that they have formalized a strategic partnership to serve the investment management community.

Compliance Risk Concepts and NexTier Consulting Solutions

The partnership benefits CRC’s investment management clients by expanding its support model to include a broad suite of strategic and tactical support services to bolster the growth of these firms while reducing business risk. As part of this relationship CRC, will have access to a broad group of seasoned investment management practitioners with a wide array of direct and practical investment management industry experience. For NexTier, the partnership replaces its current compliance offering with a robust and complete compliance solution to address the needs of its investment management clients.

In acknowledging the new joint venture, CRC’s Chief Executive Officer and Managing Partner, Mitch Avnet, stated, “We are extremely enthusiastic about our relationship with NexTier. The NexTier leadership has done a fantastic job building out a platform to serve the strategic and tactical needs of the investment management community. We believe that our alliance with NexTier will enable both organizations to disrupt our target market verticals while providing the asset management community with cost-effective, best-in-class support options and alternatives.”

In addition, NexTier’s Chief Executive Officer, Lawrence C. Manson, Jr., stated that “Our partnership with CRC significantly elevates our profile in compliance vertical which will allow our firm to expand our mission-critical, end-to-end solution offering for investment management organizations. Our mission is to elevate the operating practices of investment management organizations by providing best-in-class services.”

CRC and NexTier look forward to discussing the details of their partnership on a webcast that will be scheduled on Tuesday, October 24, 2017. More details will follow.

About NexTier Consulting Solutions

NexTier Consulting Solutions is a consulting firm focused on helping investment firms compete more effectively in the institutional investment marketplace by providing strategic and tactical support services designed to create and support growth strategies. The company was founded in 2012 and is headquartered in Chicago with an office in New York and senior consultants located in Atlanta, Denver, Philadelphia, Los Angeles and San Francisco.

Contact (Headquarters):
NexTier Consulting Solutions | 515 North State Street, Suite 2640 | Chicago, Illinois | 60654 T. 312-948-9178 | www.nextiercompanies.com

About Compliance Risk Concepts

Compliance Risk Concepts is a business-focused, team of senior compliance consultants and executives providing top tier compliance consulting services to clients on an as-needed, project or part-time basis. We provide our clients with the critical skills and expertise required to establish, maintain and enhance a balanced and effective compliance operational risk management program. We help organizations demonstrate a commitment to a strong risk management culture.

Contact (Headquarters):
Compliance Risk Concepts | 441 Lexington Ave, 11th Floor | New York, NY | 10017 United States T. 212-922-2844 | www.compliance-risk.com

The post Compliance Risk Concepts and NexTier Consulting Solutions Team Up To Serve Investment Management Community appeared first on CRC.

Webinar: How The CRC / Phocion Partnership Benefits YOU

Discussing Benefits of Strategic Alliance Between Compliance Risk Concepts and Phocion Investment Services

Join CRC and Phocion for a more in-depth discussion on how their new partnership will benefit their clients in both the US and Canada.

Date: September 12, 2017
Time: 12:00 pm – 1:00 pm EST. REGISTER HERE

After registering, you will receive a confirmation email containing information about joining the webinar.

 

The post Webinar: How The CRC / Phocion Partnership Benefits YOU appeared first on CRC.

Compliance Risk Concepts and Phocion Investment Services Formalize Strategic Alliance

NEW YORK (NEW YORK) | MONTREAL (CANADA) Compliance Risk Concepts (“CRC”), a top tier compliance consulting services firm, and Phocion Investment Services (“Phocion”), a leading service provider in performance, due diligence and compliance, are pleased to announce that they have formalized a strategic partnership.

The partnership benefits CRC’s clients by expanding their offering to include a broad suite of performance measurement services. The agreement also gives CRC its initial foray into the Canadian marketplace positioning it to better serve its clients’ cross-border needs. For Phocion, the partnership expands its United States prospect list;, particularly for the fast-growing performance measurement offerings.

In acknowledging the new joint venture CRC’s CEO and Managing Director Mitch Avnet stated, “We are extremely proud and excited about our relationship with Phocion. The Phocion leadership team has done a tremendous job as it relates to their performance measurement and due diligence capabilities. We believe our alliance with Phocion will further enable both organizations to continue to disrupt our target market verticals, providing the asset management community with cost effective, best-in-class support options and alternatives”.

Phocion’s Founder and Managing Director Ioannis Segounis went on to say that “today marks an important day in Phocion’s seven-year history. Our partnership with CRC significantly elevates our profile in the United States – by far the largest market for our services. Phocion’s mission is to elevate the operating practices of all investment industry participants by providing best-of-breed services in the areas of performance measurement, due diligence, and compliance. The agreement with CRC enables our firm to take a giant leap towards realizing this goal.”

CRC and Phocion look forward to discussing the details of their partnership on a webcast that will be scheduled on Tuesday. September 12th, 2017. More details will follow.

About Phocion Investment Services

Phocion Investment Services provides the expertise, independence, and sophisticated tools that enable our clients to meet their performance, compliance and due diligence objectives. Our objective is to bring clarity to the complexities of the investment industry and to assist stakeholders in their investment decision processes. With our team’s proven track record and the firm’s core pillars of honesty, accountability, and excellence in service, we are the industry’s trusted partner in the investment process.

Contact (Headquarters):
Phocion Investment Services | 1010 Sherbrooke Street West, Suite 1800 | Montreal, Quebec | H3A 2R7 Canada T. 514-564-9955 | www.phocioninvestments.com

About Compliance Risk Concepts

Compliance Risk Conceptsis a business-focused, team of senior compliance consultants and executives providing top tier compliance consulting services to clients on an as-needed, project or part-time basis. We provide our clients with the critical skills and expertise required to establish, maintain and enhance a balanced and effective compliance operational risk management program. We help organizations demonstrate a commitment to a strong risk management culture.

Contact (Headquarters):
Compliance Risk Concepts | 441 Lexington Ave, 11th Floor | New York, NY | 10017 United States T. 212-922-2844 | www.compliance-risk.com

The post Compliance Risk Concepts and Phocion Investment Services Formalize Strategic Alliance appeared first on CRC.

Turning Up The Heat on Social Media Regulation

When I was a freshman at DeSales University my younger, teenaged sister called me one night to tell me, in a very excited tone, “Guess what! There is this thing called the World Wide Web, it’s so cool! You can talk to people from all over the world!”. I know, I’m dating myself but what the heck. Fast-forward some 20 odd years later (I keep dating myself) and that excited younger sister has had a multitude of social media websites to choose from to communicate with people from all over the world and in more attractive interface: Facebook. Pinterest. Instagram. LinkedIn. Twitter. YouTube. Etc., etc.

How has the internet affected your personal life? What about your professional life? Do you remember the first time you created a Twitter account and tweeted all sorts of things about your firm and how amazing it was and all the wonderful services your firm provided? How about the first time your compliance officer approached you about your twitter account? Do you think compliance regulations have gone too far in policing professional social media? Let’s get a conversation going in the comments section.

Inevitably, I am confident we can all agree that the role social media has played in our personal and professional lives has been astounding. Over the years compliance staff have had to endure this significant change in the workplace and have worked to determine how best or even if they should monitor social media interactions of their firm’s employees. Regulators have seen this impact and now provide insight into how firms should curb and supervise social media use.

FINRA has been releasing notices relating to social media for a few years and most recently this past April. The notices are in Q&A format and give us a better understanding of FINRA rules and expectations regarding the rapidly changing digital communication landscape. I have included links to each of the three FINRA notices for your reading pleasure:

Regulatory Notice 17-18. April 2017
Regulatory Notice 11-39. August 2011
Regulatory Notice 10-06. January 2010

The FINRA notice released in April contained twelve Q&As which I have summarized and compiled in a friendly block format below. I also added my own two cents because what is a consulting article without your favorite consultant’s feedback? Cheeky, I know. I hope you find the way I have summarized and organized the data suitable for your business needs. Feel free to leave your comments and questions.

Thank you for reading! If you would like a Word copy emailed to you for easier reference please feel free to reach out to me directly at lcolpas@compliance-risk.com.

ABOUT LILIAN COLPAS
Lilian Colpas is an accomplished compliance professional with over 12 years of global compliance experience. Lilian provides consulting services to SEC and state-registered investment advisers and conducts AML independent reviews for broker/dealers. Previously, Lilian held roles as a compliance officer for Davidson Kempner, Harding Loevner and AIG Global Investments (now PineBridge).

1 “Ongoing” means: (a) the link is continuously available to investors who visit the firm’s site; (b) investors have access to the linked site whether or not it contains favorable material about the firm; and (c) the linked site could be updated or changed by the independent third-party and investors would nonetheless be able to use the link.
2 Native Advertising is defined a content that bears a similarity to the news, feature articles, product reviews, entertainment and other material that surrounds it online.
3 See: FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements, December 22, 2015
4 Rule 2210(d)(6), states that: (A) If any testimonial in a communication concerns a technical aspect of investing, the person making the testimonial must have the knowledge and experience to form a valid opinion. (B) Retail communications or correspondence providing any testimonial concerning the investment advice or investment performance of a member or its products must prominently disclose the following: (i) The fact that the testimonial may not be representative of the experience of other customers. (ii) The fact that the testimonial is no guarantee of future performance or success. (iii) If more than $100 in value is paid for the testimonial, the fact that it is a paid testimonial.

The post Turning Up The Heat on Social Media Regulation appeared first on CRC.

Best Practices for Managing Conflicts of Interest [Webinar]

If your firm is struggling with the management and analysis of conflicts of interest, learn from a leading industry expert about how to begin to tackle the challenge.

Join Protegent, Compliance Risk Concepts, and your peers for an hour-long webinar, sharing experiences and lessons learned in helping firms transform from manual-based conflicts reviews, to automated and efficient technology-driven processes.

Date: August 2, 2017
Time: 2:00 pm EST. REGISTER HERE

During the webinar, you’ll learn:

  • How conflicts arise
  • How firms address conflicts today
  • The regulatory landscape – recent real-world lessons
  • Best practices for meeting the challenge
    Register today and learn how to address the challenge of managing conflicts of interest.

The post Best Practices for Managing Conflicts of Interest [Webinar] appeared first on CRC.

Summer Fun and Q3 Federal Filings For Investment Advisers

As the second quarter of 2017 draws to a close we’ve put graduations behind us and for some of us, we eagerly await the start of summer camp, others plan day trips to the beach (raise your hand if you are going to the Jersey shore), invite friends for the inevitable BBQs that, for some, may result in burnt veggies and burgers… don’t tell my husband I said that.

Amidst the start of our summer fun let’s not forget our federal filing obligations due in the third quarter (sorry to quash your summer dreams). The sooner you start gathering the data required for these filings the easier it will be for you when the filings are due.

Download Summer Fun and Q3 Federal Filing Requirements Guide

For guidelines on the 2017 Q3 federal filing requirements download Lilian Colpas’ Summer Fun and Q3 Federal Filings for Investment Advisers:
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ABOUT LILIAN COLPAS
Lilian Colpas is an accomplished compliance professional with over 12 years of global compliance experience. Lilian provides consulting services to SEC and state-registered investment advisers and conducts AML independent reviews for broker/dealers. Previously, Lilian held roles as a compliance officer for Davidson Kempner, Harding Loevner and AIG Global Investments (now PineBridge).

The post Summer Fun and Q3 Federal Filings For Investment Advisers appeared first on CRC.

PaCE: Policy and Controls Environment

CRC furnishes sensible regulatory risk management services and support that achieve a comfortable balance between a client’s commercial interests and the critical need to withstand regulatory scrutiny.

In line with our ongoing efforts to provide innovative, cost-effective and practical solutions to our clients, we are extremely excited to introduce PaCE.

PaCE is a cloud-based compliance management documentation and reporting platform with superior scalability and security. PaCE automates and streamlines regulatory processes and compliance workflows for financial services companies in a careful, thoughtful and pragmatic manner.

Financial Services organizations often find themselves being priced out of good technology, further necessitating the ongoing maintenance and reliance on onerous, non-scalable and redundant manual processes. Not any more…

PaCE was created by Compliance Officers for Compliance Officers. CRC views PaCE as an industry disrupter, bringing all the necessary components of a sound and effective compliance and supervision program into a centralized, easily implemented and supported environment.

View PaCE: Policy and Controls Environment Interactive Brochure

Please fill out the form below to browse through our interactive brochure and/or print the downloadable version of the brochure for your reading pleasure.

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WTF? Why are You Such a Fiduciary?

BULLETIN: The Department of Labor (DOL) Fiduciary Rule

Spotlight On Talent: Scott Brown, Senior Consultant at Compliance Risk Concepts
The Department of Labor (DOL) Fiduciary Rule, was originally scheduled to be phased in over the period encompassing April 10, 2017 – January 1, 2018, but is now to be phased in starting June 9, 2017 including a transition period for the applicability of certain exemptions to the rule extending through Jan. 1, 2018.

In his compliance bulletin WTF? Why are You Such A Fiduciary?, Scott Brown discusses who is defined as a fiduciary, the sort of investments the rule impacts and best practices during the transition period (June 9, 2017 to January 1, 2018).

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ABOUT SCOTT BROWN

Prior to joining Compliance Risk Concepts, Mr. Brown was employed as a Principal Examiner at FINRA from 2005 to 2016. Mr. Brown’s responsibilities at FINRA included sales practice and financial examinations of member firms. Sales practice examinations entailed detailed reviews of member firms’ systems of supervision and control, reviews of policies governing marketing and sales of financial products and services (equities, mutual funds, corporate and municipal debt), and detailed reviews of broker-dealers’ anti-money laundering compliance programs. Financial Examinations involved verification of the accuracy of General Ledgers, Trial Balances, Income Statements, Balance Sheets, Net Capital Computations and FOCUS Filings for a diverse universe of broker-dealers.

The post WTF? Why are You Such a Fiduciary? appeared first on CRC.

CRC Webinar: Establishing A Regulatory-Proof Broker/Dealer Compliance Program

This webinar will discuss the necessary components of establishing and maintaining the necessary infrastructure to support and scale a best-in-class broker-dealer system of supervision.

Date: June 20, 2017
Time: 2:00 pm – 3:00 pm EST.

Learn about PaCE – Policy and Controls Environment, a brand new offering from Compliance Risk Concepts (“CRC”) that has been specifically created by a team of former industry leading CCOs to address the needs of firms that have been historically underserved and priced out of much needed technology solutions. Participants in this webinar will learn about the following PaCE features:

  • Policies and Procedures Management
  • Forms and Certifications Management
  • Incident Management and Escalation Workflows
  • Integrated Compliance Calendar
  • Professional Services and Ongoing Support
Presenters:

Mitch Avnet, Founder and Managing Partner, Compliance Risk Concepts
Mitch Avnet is the founder and Managing Partner of CRC LLC. Mitch is responsible for business development, relationship management and overseeing the execution of all client driven / business focused Compliance and Ethics Risk Management strategic engagements.

 

Kristi Kuhn, Senior Solutions Consultant, ProcessUnity
Kristi Kuhn is a Senior Solutions Consultant at ProcessUnity. Kristi has more than 12 years experience delivering governance, risk and compliance solutions to organizations of all sizes.

Moderated by:

Lilian Colpas, Senior Compliance Officer, Compliance Risk Concepts
Lilian Colpas is an accomplished compliance professional with over 12 years of global compliance experience. Lilian provides consulting services to SEC and state-registered investment advisers and conducts AML independent reviews for broker/dealers. Previously, Lilian held roles as a compliance officer for Davidson Kempner, Harding Loevner and AIG Global Investments (now PineBridge).

The post CRC Webinar: Establishing A Regulatory-Proof Broker/Dealer Compliance Program appeared first on CRC.

Webinar – Risk, Mitigation and Insurance Issues for Investment Advisers

Mitch Avnet to present at upcoming IAA 2017 webinar series, Risk, Mitigation and Insurance Issues for Investment Advisers.

Investment advisers face constant challenges to stay current and comply with new and changing regulations in an evolving market place. This webinar will help advisers to better understand these regulations and how they may reduce or mitigate certain risks with insurance.

Date: May 4, 2017
Time: 2:00 pm – 3:15 pm EST. REGISTER HERE

Registration for the live webinar closes on Wednesday, May 3, at noon ET. IAA Members and IAA Associate Members: The live webinar and a link to the recording are complimentary. (Registrations made on or before May 3 at noon ET are automatically registered for both the live webinar and the recording.)

Presenters:
  • Mitch Avnet, founder and Managing Partner, Compliance Risk Concepts, LLC
  • Lilian A. Morvay, JD, Underwriting & Risk Management Consultant––Professional Liability
  • Amir Tadjedin, Partner, Markun Zusman Freniere and Compton, LLP
  • Paul D. Glenn, Special Counsel, Investment Adviser Association, Moderator

 

The post Webinar – Risk, Mitigation and Insurance Issues for Investment Advisers appeared first on CRC.

Part 3 of 3: It’s 2017, What Are The SEC’s Priorities?

Assessing Market-Wide Risks

Spotlight On Talent: Portia Amato, Compliance Officer 

This is the third installment of our 3-part series, It’s 2017, What Are The SEC’s Priorities?, in which we discuss the 2017 examination priorities of the Office of Compliance Inspections and Examinations of the Securities and Exchange Commission.

This year the SEC priorities are organized around three thematic areas: 1) Examining matters of importance to retail investors; 2) Focusing on risks specific to elderly and retiring investors and 3) Assessing market-wide risks.

In this third and final article, we take a look at the SEC’s third focus initiative, “Assessing Market-Wide Risks”.

Download Part 3: It’s 2017, What Are The SEC’s Priorities?

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ABOUT PORTIA AMATO
Portia Amato is a seasoned Compliance Officer, having over 18 years of investment management experience. Over the course of her career, Portia has specialized in compliance, operations and client services for investment advisors and top tier investment banks. Portia also successfully helped to launched two wrap-fee programs for New York Life Investment Management and US Trust

The post Part 3 of 3: It’s 2017, What Are The SEC’s Priorities? appeared first on CRC.

Compliance Pro-Tip: Lowering Your Research Costs

Looking for an easy way to lower the operating costs of your Research Department? Consider outsourcing your Supervisory Analyst function. Chances are, you can save quite a bit. And with CRC, you won’t sacrifice an ounce of speed or quality.

Full-time SAs often encounter significant periods of downtime. That downtime, of course, is downright expensive. Aside from direct compensation, a full-time employee will likely command a benefits package, occupy company real estate and require attention from other company support areas like HR and IT. Fortunately, there’s a more reasonable alternative – retaining an on-call SA through CRC.

When considering a Compliance Advisory firm like CRC, experience is key. CRC’s Supervisory Analyst practice is led by Ms. Jeanine Oburchay who is fully qualified by license (Series 7, 24 and 87) and has the know-how to immediately make a positive impact on both your product quality and your bottom line. As a veteran of more than 17 years on Wall Street, primarily as a sell-side research analyst covering equities and convertibles, Jeanine is well-versed in all aspects of a Research Department’s mission and operational flow. Jeanine had also served as a registered SA with Wachovia Securities where she was responsible for reviewing and approving research reports for a department that published daily morning calls, weekly research publications, new initiations of coverage and timely market responses. Jeanine earned her BS in Finance and her MA in Public Communications from Fordham University and her MBA from Pace University.

All too often, SAs tend to stick to a single function – reviewing and approving research reports. CRC’s SA services, though, can also:

  • assist your firm’s compliance with documenting and retaining records of analyst public appearances;
  • chaperone interactions between your analysts and your firm’s investment banking or trading personnel;
  • oversee issuer pre-publication fact-checking exercises; and
  • manage periodic analyst certification requirements (e.g., quarterly Reg AC).

Budgeting for a research department of any size can be a costly prospect. Retaining an outsourced SA will free up resources to redirect toward more productive pursuits such as hiring additional publishing analysts or growing the size of your compensation pool. Or, of course, you can simply save the extra cash and take credit for a budget triumph.

CRC’s SA services can help you cut costs, increase efficiencies and improve your research product. For a more detailed description of CRC’s full array of services and of its professional staff contact, David Amster, Principal and Head of CRC’s Fund and Dealer Advisory practice at 917-568-6470.

The post Compliance Pro-Tip: Lowering Your Research Costs appeared first on CRC.

Part 2: It’s 2017, What Are The SEC’s Priorities? (3-Part Series)

It’s 2017, What Are The SEC’s Priorities? (3-Part Series)
Risks Specific To Senior Investors and Retirement Investments

Spotlight On Talent: Portia Amato, Compliance Officer 

Now that we have examined the SECs’ focus on Retail Investors (Part 1: It’s 2017, What Are the SEC’s Priorities?), it is time to turn our attention to the OCIE’s 2nd focus area: Risks specific to Senior Investors and Retirement Investments as well as a few other initiatives on the 2017 Priority List.

Download Part 2: It’s 2017, What Are The SEC’s Priorities?

Enter your information below to download your complimentary copy of Portia Amato’s Part 2: It’s 2017, What Are The SEC’s Priorities? Risks Specific To Senior Investors and Retirement Investments.

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ABOUT PORTIA AMATO
Portia Amato is a seasoned Compliance Officer, having over 18 years of investment management experience. Over the course of her career, Portia has specialized in compliance, operations and client services for investment advisors and top tier investment banks. Portia also successfully helped to launched two wrap-fee programs for New York Life Investment Management and US Trust

The post Part 2: It’s 2017, What Are The SEC’s Priorities? (3-Part Series) appeared first on CRC.

Compliance Bulletin: It’s 2017, What Are The SEC’s Priorities?

It’s 2017, What Are The SEC’s Priorities?

Spotlight On Talent: Portia Amato, Compliance Officer 

By now, every CCO and their team have asked themselves this question, and if you have not already, this is the time to do so, especially if you have not been the lucky host to a SEC Audit in some time.

The Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) has released their list of priorities for the year and it is covering a lot of ground. They did break it down into three focus areas:

1) Examining matters of importance to retail investors
2) Focusing on risks specific to elderly and retiring investors
3) Assessing market-wide risks


In this first part of a three-part series, Portia Amato reviews the first focus area, Examining Matters of Importance to Retail Investors, including the subtopics and how Registered Investment Advisors (RIA’s) and Broker Dealers (BD’s) alike can tackle these matters should the SEC pay a visit.

Download Compliance Bulletin: It’s 2017, What Are The SEC’s Priorities?

Enter your information below to download your complimentary copy of Portia Amato’s Compliance Bulletin: It’s 2017, What Are The SEC’s Priorities?

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ABOUT PORTIA AMATO
Portia Amato is a seasoned Compliance Officer, having over 18 years of investment management experience. Over the course of her career, Portia has specialized in compliance, operations and client services for investment advisors and top tier investment banks. Portia also successfully helped to launched two wrap-fee programs for New York Life Investment Management and US Trust

The post Compliance Bulletin: It’s 2017, What Are The SEC’s Priorities? appeared first on CRC.

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