George Carlin’s philosophy tome, Brain Droppings, is as an inspiration for my micro-blog on LinkedIn. Below are some of my most recent posts.
Firms Face Choppy Water Navigating SEC Compliance Dates
“Regulation does not exist in a vacuum.”
I appreciate Investment Adviser Association President Barr saying very publicly (and to SEC Commissioner Uyeda) what I suspect many of us who support the broker-dealer and registered investment advisor industries are thinking: The scope of the current rulemaking will tax finite compliance resources. The changes to which Ms. Barr referred do not even include the proposed changes to the market structure (Reg Best Ex, order competition, etc.). CAT implementation remains a work in progress as well. And, of course, there is always maintaining processes and procedures to comply with the current rule set.
From time to time, I meet with students at my alma mater, George Mason University – Antonin Scalia Law School, to discuss career paths. (It may be an exercise in what not to do, but be that as it may.) I think that I can recommend one high-growth sector.
FINRA Fines Webull $3 Million for Options Customer Approval Violations
I found this AWC interesting given the recent failures at the intersection of technology and finance. Many of FINRA’s concerns about options approval can be addressed with code audits and fixes. (If client’s age or experience < X, then options approval = no, etc.) However, from where I sit, sifting through client communications to identify and properly handle complaints does not have a clear tech solution. Anyone who has reviewed e-mails and/or handled upset clients knows that it is much of an art as a science at times. The algorithm may have a difficult time with nuance.
NASAA Announces Passing Scores Associated with New Exam Test Specifications
The North American Securities Administrators Association announced a couple of changes to its examinations. It lowered the passing score for the Series 65 to 70%. NASAA also updated the test specifications for the 65 as well as the Series 63 and Series 66. While this news does not move the proverbial needle like proposing significant changes to executing retail orders, it is worth noting nonetheless. This has an impact on those contemplating registration in the securities business. All registered representatives of broker-dealers must complete the NASAA exam. FINRA cannot grant a waiver. In addition, representatives of registered investment advisors must complete this exam if they do not qualify for exemption under the applicable state law or rule.
SEC to Increase Onsite Advisor Exams | ThinkAdvisor
It seems that the registered investment advisor community can expect an uptick in onsite regulatory examinations. This is not exactly a pleasant experience, but at the same time, it does not have to be overly burdensome with adequate preparation. (And no, preparation does not begin when the regulator appears on your doorstep.)
Why Would the SEC Want to Read Your Personal Texts?
In my experience, a former SEC Chair openly questioning the current regulatory practice is a rare event. But Mr. Pitt asks an important question, and from where I sit, part of a larger policy consideration. The level of disclosure required of broker-dealers, registered investment advisors and their associates relative to other positions of public trust – doctors, nurses, police officers, regulators, etc. (and yes, even lawyers) – is . . . interesting. I am not necessarily saying that it is wrong. Just interesting.
FINRA Provides Update on Sweep: Social Media Influencers, Customer Acquisition and Related Information Protection
Social media can be an effective marketing tool (he writes with no sense of irony). I confess that I found an effective yoga program on Instagram. (Okay, lots of funny cat videos too.) If you are with a broker-dealer that uses social media in its marketing efforts, then FINRA has guidance for you. (Spoiler alert: procedures and training always matters.)
I invite you to contact me or subscribe to my feed to learn more.
Thank you for reading this article. Please know that I wrote it for informational purposes only (some may consider it ADVERTISING MATERIAL) and did not intend for it to be legal advice or to form an attorney-client relationship with you – especially in jurisdictions where I am not licensed to practice law. I encourage you to seek your own counsel to help you with your specific situation. To that end, I invite you to contact me if you would like to discuss my services.
I enable broker-dealers, registered investment advisers and their associates to spend more time growing their business by helping them address a wide range of legal and compliance responsibilities.