Compliance Rules Grid

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Checklist of items a broker dealer needs to cover and how often

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Compliance Rules Grid

  1. 1. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Heightened Supervision Supervisory Control System FINRA rules 3012 (a) (1) Testing the Supervisory Producing Manager Review Annual Review of Key Contacts Designation of Principals – FINRA rules 3010(a)(2); 3010(b)(3) Firm's Written Supervisory Procedures to Ensure that All Rules are System FINRA Rule 3012(a)(2))C) if – FINRA rule 1150 Addressed App. Supervisory Control System FINRA rules 3012 (a) (2) (i-iv) Identifying Review of Outsourcing Annual Compliance and Supervision Certification – FINRA rule Producing Managers and Assigning Qualified Supervisors FINRA Rule Activities to Third-Party Service 3013(b) 3012(a)(2))C) Providers – FINRA rule 3010 Supervisory Control System FINRA rules 3012 (b) (2) (i) (ii) Supervision Review of Businesses – FINRA rule 3010© of Transmittal of Customer Funds or Securities Supervisory Control System FINRA Rule 3012(a)(2)(B) Supervision of Annual Compliance Meeting or Interview – FINRA rule 3010(a)(7) Customer Changes of Address - Supervisory Control System FINRA Rule 3012(a)(2)(B) Supervision of Form BD and Membership Agreement – FINRA By-Laws Art. IV, Customer Changes of Investment Objective - Section 1 Supervisory Control System FINRA Rule 3012(a)(2)(A)(ii) Use of the Limited Size and Resources Exception for Branch Manager Supervision, Annual Review of Key Contacts – FINRA rule 1150 Including the Factors Used in Determining the Exception is Necessary - Heightened Supervision Procedures -FINRA Rule 3012 (a)(2)C) Designation of Chief Compliance Officer –FINRA rule 3013(a) Designation of Contact Persons – FINRA rule 1150 Determining Qualifications of Supervisory Personnel – FINRA rule 3010(a)(6) Designation of Principal Responsible for Supervision of Form Filings – FINRA rule 1140 Assignment of Registered Persons – FINRA rule 3010(a)(5) Supervisory Personnel Record including titles, registration status and locations – SEC rule 17a-3(a)(12) Distribution of Procedures and Amendments – FINRA rule 3010(b)(4)
  2. 2. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Form BD and Membership Agreement – FINRA By-Laws Art. IV, Section 1 Designation of Persons Responsible for Explanation of Books and Records– SEC rules 17a-3 and 17a-4 & FINRA rule 3110 Records of Reports - Records of Procedures and Manuals Soft Dollars – SEC Section 28(e) Approval of Outsourcing Activities to Third-Party Service Providers – FINRA rule 3010 Compliance Announcements of Rule Updates SRO Inquiries Branch Office Inspection Schedule for Locations at which the Firm Conducts Locations at which the Firm Conducts Business – FINRA rule 3010(c)(1) Activities Business – FINRA rule 3010(c)(1) Rules Applicable to Supervision of Non-OSJ Branch Office Activities - Annual OSJ Inspection – FINRA rule 3010 © FINRA rule 3010 © Periodic Review of Non-Branch Location - FINRA rule 3010 © Branch Office Inspection - FINRA rule 3010 © Supervision of Non-Branch Business Locations - FINRA rule 3010 © Broker-Dealer Activity on Premises of Financial Institutions – FINRA rule 2350 Ongoing Personnel Registration Personnel Proper registration and Disclosures to New Hires/Terminations, Periodic Outside Business Activities - Initial and Annual Attestation – FINRA – Periodic Review – FINRA rule Matters reviews exam scheduling coordination etc. – FINRA rule 3080 rule 3030 1120 Organization Chart Update Private Securities Transactions - Initial and Annual Attestation – Fingerprinting – SEC rule 17f-2 and FINRA rule 1140 Review FINRA rule 3040
  3. 3. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Continuing Education – Needs Analysis Assessment – FINRA rule Monitor compliance with Background Investigations – FINRA rules 3010(a)(6) and 3010(e) 1120 regulatory element 1120 Proper Registration Upon Hire - FINRA By-Laws, Article III, Section 2; Continuing Education – Training Plan and Materials - FINRA rule FINRA rules 1070; 1021; 1022; 1030; 1040; 1100; & 1110 1120 Continuing Education – Maintain records of attendance - FINRA rule Ongoing Personnel Registration – Changes in Duties – FINRA rule 1120 1120 Personnel Files Identification Numbers or Codes Continuing Education – Designate CE contact with FINRA Parking of Securities Registrations – FINRA rule 1031(a) Supervision of Statutorily Disqualified Individuals – FINRA By-Laws, Article III, Sections 3 and 4; FINRA rule 3070 Termination of Registration - FINRA By-Laws, Article III, Sections 3 and 4 Continuing Education – Regulatory Element – FINRA rule 1120 Outside Business Activities - Initial Request – FINRA rule 3030 Outside Business Activities - Initial and Annual Attestation – FINRA rule 3030 Private Securities Transactions - Requests & records of – FINRA rule 3040 Compensation Arrangements and Employee Agreements Compensable Transactions Customer Complaints – FINRA rule 3110 Reporting of complaints, actions etc. – FINRA rule 3070
  4. 4. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Trading in Advance of Insider Trading Restricted Lists Chinese Walls Insider Trading Training Research – FINRA IM 2110-4 Monitoring for Insider Trading, update employees on new rules for insider Restricted List -Compliance Front Running – FINRA IM- Insider Trading Require employee to sign attestation NTM-91-45 trading Review 2110-3 Net Capital Computation (Trial Financial Net Capital - Part I - SEC rules Net Capital - Part II - SEC rules FinOp Training – NTM 06-23, 1022(b); 1022©, Balance) – SEC rules 15c3-1 FinOp Assessments – NTM 06-23 Reporting 15c3-1 and 17a-11 15c3-1 and 17a-11 and 17a-11 FinOp Periodic Reviews (NTM FinOp Periodic Reviews – NTM 06-23 Audited Financials - SEC rules 17a-5 and 17a-11 06-23) Charges for services performed- On-Site Documentation – NTM 06-23 FINRA rule 2430 Net Capital - Early Warning - SEC rules 15c3-1 and 17a-11 Material Inadequacy - SEC rule 17a-5(g)(3) Designation of Accountant - SEC rule 17a-5(f)(4) Customer Reserve – SEC rule 15c3-3 Handling Customer Funds and Securities - SEC rules 17a-5 and 17a-11 Lost and Stolen Securities - SEC rules 17a-5 and 17a-11 Margin Requirements – FINRA rule 2520 Cash Account Provisions of Reg.-T FINRA Fees and Assessments- FINRA By-Laws Schedule A Charges for services performed – FINRA rule 2430
  5. 5. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Mandatory Electronic Filings – FINRA rule 3170 Customer Exception Reports (Pershing) Prohibition Against Guarantees - Changes of Customer Address Customer Account Statements Acceptance of New Accounts – Customer Approval SIPC Disclosure Accounts FINRA 3230© NTM 99-57 FINRA rule 2330(e) FINRA Rule 3012(a)(2)(B) (2340) Spot Check Clock Changes of Customer Markups and Commissions - Acceptance of New Accounts - Imposition of Credit Limits Synchronization - FINRA rule Investment Objectives FINRA Investor Education & Protection 2280 FINRA IM-2430, 2440 6953 Rule 3012(a)(2)(B) Accounts for Persons Associated at Other Broker/Dealers – FINRA rule Transaction Monitoring, Trade reporting by 3rd parties if FINRA Compliance Report 3050 Account Reviews applicable Cards Trade Reporting Periodic Review of Open Furnishing Account Information to Customers ACT/OATS/TRACE Reporting Accounts 3010(d) FINRA rule 6130 Records of Customer Agreements General Fails & DKs Account Activity - review Borrowing From or Lending to Customers – FINRA rule 2370 Account Designation Changes – FINRA rule 3110(j) Changes of Address- FINRA rule 3110(j) Mail - FINRA rule 3110(i) Churning – FINRA IM-2310-2 Customer Account Statements & Order Tickets– FINRA rule 2110, 10b- 10, 11Ac-3,2320,2830,3110, SEC Rule 17a-3(a) Risk Management (financial or credit account level or credit breaches) Dealing with Ongoing Personnel Registration Daily Review of Accounts - Unauthorized Trading – FINRA Gifts and Gratuities – Approval Customers and Suitability of Recommendations – FINRA rule 2310 – Periodic Review – FINRA rule Employee and Related Accounts - FINRA rule 2110 FINRA rule 3010© IM-2310-2 Process - FINRA rule 3060 Activities of RR's 1120
  6. 6. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Reg SP Privacy and Opt-out notifications, including procedures for Employee and Related FINRA Contact Information Markups and Commissions - FINRA IM-2440 ensuring customer information is safeguarded, ensure proper Accounts - FINRA rule 2110 review FINRA rule 1150 disposal of consumer report information Approval of Account Name or Designation Changes for Orders - FINRA Trading in Advance of Registration of Research Analysts FINRA 1050, 2711, NTM 07-04, Continuing Education Updates rule 3110 Research (FINRA 2110) NTM 0481, NTM 04-18 Prohibition Against Guarantees - FINRA rule 2330(e) Research Quit Periods FINRA 2711, 2210 Gifts and Gratuities – Aggregation of Gifts - FINRA rule 3060 Gifts and Gratuities – Business Entertainment Accounts Maintained at Other Broker-Dealers - List of Personal Accounts at Time of Hire – FINRA rule 3050 Accounts Maintained at Other Broker-Dealers - Receipt of Statements and Confirms – FINRA rule 3050 Employee and Related Accounts - FINRA rule 2110 Reg SP Privacy and Opt-out notifications, including procedures for ensuring customer information is safeguarded, ensure proper disposal of consumer report information U-4/U-5 or Form BD Disclosures or Updates Outgoing Written Outgoing Electronic Communication Advertising & Sales Literature - (including e-mail & websites) FINRA rule Communication - FINRA rule Communication - FINRA rule with the Public 2210 3010(d) 3010(d) Incoming Written Incoming Electronic Institutional Sales Literature & correspondence - FINRA rule 2211 Communications - FINRA rule Communications - FINRA rule 3010(d) 3010(d) Instant Messaging (Bloomberg) - Speaking Engagements, scripts, outlines - FINRA rule 2210 FINRA rule 3010(d) quot;Internal Use Onlyquot; Material not released to Public
  7. 7. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Cold-Calling - FINRA rule 2210 Payment for Order Flow - FINRA rule 2110 Fixed Income Securities Trade reporting – Best Execution - FINRA rule Clock Synchronization - FINRA Trade Reporting Securities Parking Review – FINRA rule 2110 ACT/OATS/TRACE FINRA 2320 rule 6953 Rule 6130 Timely Acceptance and Entry of Adjusted Trading: Trade Errors, Commission Adjustments & Position Comparison of OATS and ACT Trades Reportable by Other Logs Data – FINRA rule 6954 Firms – FINRA rule 6130 Correctly Marking and reporting a Sale as Long, Short, or Short Best Execution – Routed Orders – FINRA rule 2320 Exempt – SEC rule 203, FINRA rule 6130 OATS Data Accuracy - Monitoring the Accuracy and Interpositioning – FINRA rule 2320 Timeliness of OATS Submissions by Third Parties - FINRA rule 6954 Correction and Re-submission Trade reporting – FINRA rule 6130 of Data Rejected by OATS – FINRA rule 6954 Riskless Principal Trade Reporting – FINRA rule 6130 Anti-Competitive Practices – SEC 21(a) Report and FINRA IM-2110-5 Transmitting OSO Agreement - FINRA rule 6954 OATS Announcements of Updates from FINRA.ORG Handling of Customer Orders During Market-Wide Trading Halts Records of Executions
  8. 8. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Business Emergency Contact Persons, Significant Business Disruptions (quot;SBDquot;), Daily Data Backup (Hard & Weekly Data Backup (Hard & Monthly Data Back-Up Quarterly Data Back-Up Approval and Execution Authority Continuity Plan Location and Access, Clearing Firm Electronic Systems) Electronic) (Electronic) (Electronic) Office Location(s), Alternative Location (s) Updates and Annual Review Customer' Access to Funds and Securities Data Back-Up (Hard Copy) Data Back-Up and Recovery (Hard Copy and Electronic) Operational Risk Financial and Credit Risk Mission Critical Systems Clearing Firm Responsibilities Recovery Time Order Taking Order Entry Order Execution Alternative Communications – Customers
  9. 9. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Alternative Communications – Employees Business Constituents-Banks Counter-Parties Regulatory Reporting Disclosure Statement Providing AML Information to federal Law Enforcement Anti-Money AML Procedures - Amendments 3011 Agencies and Other Financial Wired Funds/Securities (AML) AML Compliance Program - Approval 3011 Laundering Institutions - FinCEN Requests Under PATRIOT Act Section *all elements required FinCEN Requests Under AML Procedures - List of Entities Covered Restricted by FinCEN Special even if considered PATRIOT Act & Bank Secrecy Annual Audit Independent Test 3011 quot;NAquot; to business Measures Act Section 314 bi-weekly Firm’s AML Policy Senior Manager Approval of AML Program AML – AML Compliance Officer Designation and Duties AML-Contact Person Providing AML Information to federal Law Enforcement Agencies and Other Financial Institutions - Sharing Information With Other Financial Institutions US Patriot Act, Section 314 Checking the Office of Foreign Assets Control (“OFAC”) List Customer Identification and Verification -Required Customer Information NTM 03-34 Customer Identification and Verification - Customers Who Refuse To Provide Information Customer Identification and Verification - Verifying Information
  10. 10. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Customer Identification and Verification - Lack of Verification Customer Identification and Verification - Comparison with Government Provided Lists of Terrorists and Other Criminals Customer Identification and Verification - Notice to Customers Customer Identification and Verification - Reliance on Another Financial Institution for Identity Verification Foreign Correspondent Accounts and Shell Banks - Detecting and Closing Correspondent Accounts of Foreign Banks and Shell Banks Private Banking Accounts/Foreign Officials Transaction Monitoring, Account Reviews SAR Filing - Responding to Red Flags and Suspicious Activity Currency Reporting and Wire Transfers - Generally Currency Reporting and Wire Transfers - Currency Transaction Reports Currency Reporting and Wire Transfers - Currency and Monetary Instrument Transportation Reports Currency Reporting and Wire Transfers Foreign Bank and Financial Accounts Reports (“FBAR”) Filing currency transaction reports CTR's Bank Secrecy Act
  11. 11. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months) Ongoing Training Confidential Reporting of AML Non-Compliance Monitoring Employee Conduct and Accounts Senior Manager Approval of AML Program
  12. 12. Rule Category As-Needed or when applicable Daily Weekly Monthly Quarterly Annually (*or rolling 12 months)

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