Financial services firms want their compliance processes to be in line with best practices of peer firms, meet their regulatory obligations and help reduce regulatory risk, while providing a superior user experience for their financial professionals and effective review process for their principals. However, the time needed to create comprehensive, regulatory-minded, user-friendly submission forms and other necessary content can be challenging due to competing compliance priorities.
Regulation of the securities industry is based on a self-regulatory framework, and it is the expectation of regulators that securities principals are basing their decisions with a full understanding of the underlying request. The types of actions in which a financial professional could engage are numerous, and it can be difficult and challenging to create submission processes that are effective in gathering all necessary information, let alone keeping abreast of industry best practices and evolving regulatory obligations.
For example, FINRA Rule 3270 (Outside Business Activities), requires a principal to determine if an Outside Business Activity could interfere with or otherwise compromise the registered person’s responsibilities to the firm, be viewed by customers or the public as part of the member’s business, and whether the proposed activity should be treated as private securities transaction subject to Rule 3280. That is in addition to whether the activity creates potential liability, business risk, custody concerns, additional supervisory burdens, and so on. In order to fully understand the activity, a principal should understand the type of activity, custody/control of funds, associated outside accounts, funding, time commitment, ownership, conflicts of interest, and many other areas.
The same principle applies to fully understanding a financial professional’s outside accounts; their gifts, entertainment, and other cash/non-cash compensation; the full scope of their sales practices, understanding of rules and policies, and other practices as detailed in the Annual Compliance Questionnaire; testimonials and endorsements; potential problematic content in advertising submissions, and much more.
Our new customers often ask for our guidance on regulatory and peer-based best practices relating to the content, organization and structure of their compliance disclosure forms and review processes. For all types of submissions, it is helpful to both submitters and the reviewing principals to have effective questions and sub-questions to gather the relevant information up-front, providing reviewers with full context and allowing them to meet their regulatory obligations. Doing so can reduce the back-and-forth communication needed and provide a superior service experience.
RegEd offers a variety of turnkey, best practices compliance content that has been created by former compliance officers with decades of compliance experience which are in line with industry best practices and current regulatory obligations.
This currently includes client-driven, regulatory-focused submission templates with best practices content for our following solutions:
- Outside Business Activities questionnaire
- Personal Securities Account
- Gifts, Gratuities & Contribution requests
- Annual Compliance Questionnaire (for broker/dealers)
- Continuing Education Needs Analysis Questionnaire
- Testimonials and Endorsements Disclosures
- Form ADV Part 2B brochure
- Lexicon detection with database of keywords/phrases for Advertising Review
- The comprehensive nature of our material allows your firm to gather all necessary information upfront within the submission to provide full context to the reviewing principal. For example, our OBA questionnaire covers 25 categories of activities, and our Gifts, Gratuities & Contributions solution has 10 categories including gifts, business entertainment, marketing assistance, paid endorsements/testimonials, and more.
- Detailed branching questions reduce the need for additional data gathering after the submission, improving the turnaround time while reducing regulatory risk
- Pre-built, automated follow-up tasks allow you to ensure consistency in your review process and create an audit trail for internal and external stakeholders
- RegEd’s solutions contain pre-built reports that allow you to analyze data for trends, risks, overall compliance, and educational opportunities. The reporting functionality allows you to select specific data points to help you drill down into the data and perform more targeted analyses.
- RegEd regulatory staff update our content library on a basis to incorporate new rules and regulations across the RegEd platform; regulatory, technology, and risk trends; regulatory guidance, best practices, examination priorities; and a summation of best practices identified by working with our customer base, so when you implement you will have content that is current and relevant.
- There is no additional cost for leveraging RegEd’s turnkey content, and of course your firm has the option of using its own content for any of our solutions as well. As part of your RegEd implementation, you will be able to make any necessary updates to align our content with your firm’s unique terminology, structure, and policies & procedures. Your firm is in control of content after implementation, although subsequent RegEd content updates can be provided upon request.
- RegEd’s Implementation team is provides an excellent, consultative experience that begins with understanding your firm’s specific structure and requirements. Our team of experienced implementation professionals will work with you to design a submission and review process that meets your firm’s specific needs.
RegEd is the market-leading provider of RegTech enterprise solutions with relationships with more than 200 enterprise clients, including 80% of the top 25 financial services firms.
Established in 2000 by former regulators, the company is recognized for continuous regulatory technology innovation with solutions hallmarked by workflow-directed processes, data integration, regulatory intelligence, automated validations, business process automation, and compliance dashboards. The aggregate drives the highest levels of operational efficiency and enables our clients to cost-effectively comply with regulations and continuously mitigate risk.
Trusted by the nation’s top financial services firms, RegEd’s proven, holistic approach to RegTech meets firms where they are on the compliance and risk management continuum, scaling as their needs evolve and amplifying the value proposition delivered to clients. For more information, please schedule a consultation.