In today’s complex regulatory environment, broker-dealers must adhere to strict compliance requirements that protect the interests of clients, colleagues and firm assets. As a premier FINRA broker-dealer compliance consulting firm, Vigilant Compliance provides broker-dealers with a broad range of compliance services, including:
- Outsourced Chief Compliance Officers (CCO)
- CCO Support Services
- Financial Operation Principals (FinOp)
- Policy development and review services
- FINRA broker-dealer initial registration services
- Change in Membership Application services
- FINRA compliance evaluation and consulting
Qualifying as a Broker-Dealer
The Securities Exchange Act of 1934, signed into law during the Great Depression, protects investors by regulating the way broker-dealers are allowed to operate in open markets. Penalties for failure to follow regulations can be severe, and resulting losses often cost firms and their clients millions, and sometimes billions, of dollars. The SEC defines a broker as “any person engaged in the business of effecting transactions in securities for the account of others.”
A broker may include an individual who sources investment banking clients, venture capital firm investors, mergers and acquisitions professionals, and securities intermediaries. Investment advisers are often considered broker-dealers, as are those who perform transactions for others, even if “others” include only family members. If you are not certain whether or not your firm is a broker, Vigilant Compliance can help.
Brokers act as agents but dealers are the principals. Market makers are dealers, as are those who originate, buy and sell securities. An individual who matches repurchase agreements may be considered a dealer. If your business advertises its ability to buy and sell security, works with the public on an institutional or retail basis, provides investment advice and related financial services, writes derivatives contracts or underwrites securities offerings, you may be a dealer.
Registering as a Broker-Dealer
There are limited exceptions to the broker-dealer rule, but in most cases firms that meet these basic guidelines must adhere to the Act, including registering with the SEC. Vigilant Compliance can help your business determine whether or not it needs to register with the SEC.
For example, although broker-dealers that only conduct business in one state are not required to register, firms that trade on national exchanges, such as the NYSE and the NASDAQ, must register with the SEC. Also, broker-dealers that advertise or post information on the Internet are generally required to register. This is because Internet advertising is considered interstate commerce. American broker-dealers that conduct business outside the U.S. are still required to register.
The Vigilant Compliance 5 Step Matrix SystemSM
Vigilant Compliance provides comprehensive and customized compliance services to broker-dealers around the globe. With Vigilant’s 5 Step Matrix SystemSM, you can choose our whole Matrix of Services, or only those that service your needs, such as providing support services to your in-house CCO.
- Conduct specialized meeting to Review Written Supervisory Procedures
- Preparation of Compliance Flow Charts for Broker-Dealer
- Designate a VC Professional to serve as your Compliance Consultant
- Prepare a Risk Matrix
- Prepare and Maintain Broker-Dealer Compliance Calendar
- Prepare or Update your Written Supervisory Procedures Manual
- Conduct Outsourced Compliance Review of All Critical Areas
- Review of Marketing Materials for Compliance with FINRA Rules
- Perform Anti-Money Laundering Review
- Conduct testing and verification of the Firm’s Supervisory Procedures
- Conduct your Required Annual Firm Element Training
- Conduct Insider Trading Training
- Conduct Required Code of Ethics Training
- Preparation of FINRA Rule 3012 Report
- Preparation of Annual Anti-Money Laundering Report
- Sarbanes-Oxley (SOX) Internal Control Reviews
- Review of Know Your Customer Reports and Suitability
- FINRA Disciplinary Disclosure Reporting
- Review of Customer Privacy Protection Procedures
- Branch Office and Office of Supervisory Jurisdiction Reviews
- FINRA Examination Support
- FINRA Exam Coordination
- Collect Supporting Documentation for FINRA Examinations
- Respond & Resolve SEC Inquiries
Contact Vigilant Compliance for More Information
Vigilant Compliance will help your firm develop and implement a strong compliance program that assures your culture is one that respects the law. Our consultants, located in New York, Philadelphia, Boston, Dallas and Washington, D.C., Vigilant Compliance is well positioned to help your business create and sustain an effective compliance policy. bring a broad range of compliance experience to every client we serve. Whether you need a comprehensive overhaul, basic training and exam preparation, forensic services or filing preparation, Vigilant Compliance is prepared to serve your needs.
Modified: November 7, 2018