Broker dealer compliance is an ongoing obligation, and consultants provide support for firms that need to adhere to specific regulations. Compliance services for broker dealers include developing policies, monitoring the program, and preparing for regulatory examinations. Understanding these services helps firms navigate compliance challenges. Here is more information on broker dealer compliance services:
Understanding Broker Dealer Compliance
Compliance for broker dealers involves more than just meeting requirements for filing. Broker dealers may need to apply for FINRA membership, including filling out a New Membership Application (NMA). This requires careful planning and detailed documentation, so firms should work with a qualified FINRA Series 24 consultant. Applying for a FINRA membership begins with establishing a clear business plan that details how the firm will operate and maintain compliance. During the application process, firms should be prepared to respond to inquiries and complete an interview.
The consultant can create a broker dealer compliance program by developing effective procedures and monitoring regulatory obligations. Once firms are registered with FINRA, they require ongoing support to make sure they remain compliant. Consultants may provide off-site guidance to assist with this process. Some firms require involvement from consultants on a retainer basis, and others only need assistance for specific projects. These compliance services help businesses create a program that:
- Aligns with their operations
- Adapts to changes in the organization
- Maintains regulatory expectations
Evaluating Key Areas Covered
Some consulting companies provide varied services, allowing firms to have comprehensive and consistent support. Working with a company that provides an outsourced Chief Compliance Officer (CCO) enables firms to have compliant procedures. The CCO develops policies and monitors regulations. They also oversee day-to-day compliant activities, allowing firms to focus on other business matters. Outsourced CCOs may have broad industry knowledge to help them create relevant regulatory practices. This provides an alternative to having an in-house CCO for small firms who don’t require a full-time role.
Look for a company that also offers outsourced Financial and Operations Principal (FinOp) services. A FinOp provider oversees a firm’s records and books, and they file financial regulatory reports. FinOp professionals verify that broker dealers remain compliant with industry net capital rules. Firms that need comprehensive support can work with a FinOp expert, who assists with managing financial duties and FINRA filings. This provides firms with a broader support structure that maintains compliance in all required areas.
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Navigating Broker Dealer Compliance Challenges
An ongoing compliance program helps identify areas with potential problems. Policies and procedures need to be properly maintained, so consultants provide oversight of the program, including documentation review and policy implementation. Proper documentation demonstrates that a firm actively follows the compliance program and promptly addresses any issues that arise during review. Consultants may monitor different files, such as:
- FINRA
- Disclosures
- Customer Accounts
- Registered Representative
Firms should have supervisory procedures that reflect their business’s operations. To prevent insufficient supervisory procedures creating a compliance risk, consultants update and maintain Written Supervisory Procedures (WSP). These procedures need to be operational and relevant to the firm, and they can be revised to reflect compliant changes.
For firms that require anti-money laundering (AML) testing, certified professionals implement proper procedures. Testing makes sure firms have effective AML policies, and specialists will detail any changes needed so the firm remains compliant. During reviews, AML specialists verify that changes have been updated to include new regulations. They can tailor the test to be relevant to the firm’s requirements for AML testing.
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Using Outsourced Compliance Support
Some firms have a limited business model; these businesses benefit from outsourced compliance support. Outsourced services help smaller firms avoid managing programs with a limited staff, which could stretch resources. These services also help complete annual compliance reviews and prepare for program examinations. If a firm has an in-house CCO, an outsourced company can provide support for specific projects or if regulatory obligations become complex. Consultants help firms build and maintain the program to make sure it meets evolving regulatory requirements.
Use Broker Dealer Compliance Services
Maintaining an effective broker dealer compliance program requires ongoing reviews and policy updates. Compliance consultants support firms in operating within FINRA requirements. They can also manage cybersecurity; this involves annual testing and risk assessment. Outsourced CCO and FinOp services help verify that a firm’s program has proper procedures that align with its business operations. Contact regulatory consultants today to learn more about their services.
