SEC Archives

Navigating Regulatory Disparities: Broker-Dealer Branch Office Inspections

Introduction The financial services industry is constantly evolving, and regulatory bodies play a pivotal role in protecting investors as well as maintaining the integrity and stability of the markets. Recent enforcement events are at the center of a regulatory conundrum. Maine has sanctioned at least 28 broker-dealers so far this summer for failing to conduct annual onsite branch office inspections, drawing attention to the compliance challenges broker-dealers faced due to the lack of uniformity within the regulatory landscape. Maine isn’t the only state with an annual onsite branch office inspection requirement. The Regulatory Dilemma The heart of the issue lies […]

Regulators Crackdown on Off-Channel Communications Violations

SEC and CFTC issue penalties for non-compliance with approved communication channel requirements Recent developments involving compliance breaches and off-channel communications have brought the topic into the spotlight. Two significant cases, one by the Commodity Futures Trading Commission (CFTC) and another by the Securities and Exchange Commission (SEC), underscore the importance of adhering to regulatory standards in this area. In this blog post, we dive into the details and implications of these recent enforcement cases and how firms can leverage training and technology to reduce non-compliance risk. CFTC’s Message: Unapproved Communication Methods Lead to Penalties The CFTC has taken a firm […]

RegEd Announces Next-Generation Trade Supervision and Account Monitoring Solution to Advance Investor Protection

July 25, 2023
by Eric Clements

RegEd SmartCompli, Powered by InvestEdge, Delivers the Most Advanced, Comprehensive Solution in the Industry Today RegEd announced SmartCompli, which employs advanced technology and a proprietary data model that aggregates and normalizes trade, account and KYC data, from all major clearing and custody firms, as well as direct business. SmartCompli is integrated with RegEd’s market-leading Xchange Registration solution, enabling instant validation of advisor credentials to ensure that trades are made compliantly. This eliminates the need for firms to manage data exports on a continuous basis. Joe DiAngelo, EVP Sales at RegEd discussed the typical challenges confronting the industry. “Today firms have […]

New States Adopt NASAA IAR CE Model Rule, California Expected To Join

Investment adviser representatives (IARs) are required to meet Investment Adviser Representative Continuing Education (IAR CE) requirements annually if registered in a state that has adopted the North American Securities Administrators Association (NASAA)’s Investment Adviser Representative Continuing Education Model Rule. There are currently eleven (11) states that have adopted and implemented the IAR CE requirement. An additional four (4) states have adopted the IAR CE model rule with an implementation date of Jan. 1, 2024, among them is the state of Florida. More states, including California, are expected to adopt IAR CE requirements this year. With the possible addition of California, […]

SEC Releases Risk Alert on Adviser Marketing Rule Outlining Key Areas of Focus for Examinations

The Securities and Exchange Commission (SEC) recently published a risk alert highlighting additional areas of focus in relation to the amended Marketing Rule. In 2020, Rule 206(4)-1 under the Investment Advisers Act of 1940 was amended to modernize rules that govern investment adviser advertisements and payments to solicitors. The first risk alert was published September of 2022 and detailed performance advertising, substantiation, policies and procedures, and books and records requirements. In addition to the initial Marketing Rule exam areas of review, the recent alert emphasizes three key areas of additional emphasis: testimonials and endorsements, third-party ratings, and Form ADV. The […]

FINRA Introduces New Remote Inspections Pilot Program

Three-Year Pilot Program Seeks to Modernize Inspection Process for OSJs, Branch Offices, and Non-Branch Locations The Financial Industry Regulatory Authority (FINRA) has withdrawn its original remote inspection pilot program from 2022 and proposed a new pilot initiative. This revised program aims to bring the inspection process for Office of Supervisory Jurisdiction (OSJ), branch offices, and non-branch locations into the modern era. The proposed pilot program is currently open for public comment. Risk Assessments and Preaudit Questionnaires The pilot program, which is set to last for three years if approved by the Securities and Exchange Commission (SEC), would require participating firms […]

Highlights From the SEC Municipal Advisor Risk Alert

The SEC has provided a Risk Alert to remind municipal advisors of their obligations and to raise awareness among Municipal Advisors (“MAs”) of the most often cited deficiencies and weaknesses observed in recent MA examinations. Many of the same areas were covered in its 2017 Risk Alert, indicating that the SEC continues to note similar deficiencies as it did 5 years ago. Inaccurate or Incomplete Registrations and Filings The SEC found significant overlap in registration and filing deficiencies when compared to those identified in its 2017 Risk Alert. Among the inaccurate or incomplete information filed on SEC Forms MA and […]

Securities Enforcement Trends Reflect Regulators’ Concerns for Investors

Securities regulators have stepped up enforcement to protect investors from emerging threats and evolving risks. From Reg BI to crypto to senior fraud, regulators have increased scrutiny and sanctions to punish violators and prevent future infractions. “Restoring trust in our financial markets and institutions requires the use of robust remedies,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said recently, in congressional testimony regarding the regulator’s enforcement priorities and budget request. “In addition to punishing wrongdoers for violations of the securities laws, our remedies must deter those violations from happening in the first place. They must be viewed […]

Complying with Pay-to-Play Rules in an Election Year

This year’s mid-term elections pose a compliance challenge for registered investment advisory (RIA) firms. When it comes to politics, investment advisers and their covered associates can be as passionate as any voters. But “pay-to-play” rules prohibit advisers from making political donations that many other voters could. SEC Rule 206(4)-5 considers it to be unlawful for investment advisers to provide investment advisory services for compensation to a government entity within two years after a contribution to an ‘official’ of the government entity is made by the investment adviser or any of its covered associates, including a person who becomes a covered […]

5 SEC Examination Priorities for 2022

The SEC’s Division of Examinations’ exam priorities for fiscal year 2022 include standards of conduct as well as issues related to technology and investment products. “The Division will prioritize examinations of several significant focus areas that pose unique or emerging risks to investors or the markets, as well as examinations of core and perennial risk areas. Their importance to investors and the markets, coupled with the seriousness and frequency of observations in prior years’ examinations, demonstrate the need for the Division to remain vigilant in these areas,” according to the 2022 Examination Priorities report released by the SEC on March […]

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