Later this summer the Securities and Exchange Commission (SEC) and the Financial Industry National Regulatory Authority (FINRA) will jointly hold a National Compliance Outreach Program for Broker-Dealers. This one-day program is designed for compliance, audit, and risk officers of broker-dealer firms and frequently highlights areas of concern to FINRA.
Details of the Program
The program was created with the intention that it will provide regulators and industry professionals an open forum for discussion related to compliance practices. In addition, the program helps to facilitate the exchanging of ideas related to effective and efficient compliance structures.
This year’s program has two main areas of focus: cybersecurity and anti-money laundering. These areas of focus are part of the 2015 priorities for FINRA and the SEC’s Office of Compliance Inspections and Examinations (OCIE). Susan Axelrod, FINRA’s Executive Vice President of Regulatory Operations, stated, “[f]ace-to-face meetings of this kind, which allow for a meaningful dialogue regarding significant and timely compliance issues, are more valuable than ever.”
The cybersecurity focus is on the mitigation of cybersecurity risks. The risks to cybersecurity can result from both intentional acts and unintentional events. Harm committed through a breach of cybersecurity may be carried out for a variety of objectives, including the theft of financial assets, intellectual property, or other information that belongs to a registrant, a registrant’s customers, or a registrant’s business partners.
For the anti-money laundering portion of the program, the panelists will focus on risks and vulnerabilities associated with money laundering, such as bank-like activity, direct market access from high-risk jurisdictions, and the obligations and expectations relating to suspicious activity reporting.
Anti-money laundering continues to be an area of focus for both the SEC and FINRA. Earlier this year, FINRA disclosed it would be examining how firms monitor customer trading, as well as how firms create surveillance systems that fit with the particular money-laundering risks that arise as a result of the firm’s business lines, products, and client bases. Further, FINRA has a particular focus on specific account categories, such as Cash Management Accounts.
The SEC stated it will continue to use its analytic capabilities to exam firms’ anti-money laundering programs. In addition, the SEC has started examinations of anti-money laundering programs that permit customers to deposit or withdraw cash or that provide direct access for customers to markets from higher risk jurisdictions.
Help for Investors
If you are an investor and would like more information relating to the securities industry, contact an experienced securities law attorney. At the Silver Law Group, we have the knowledge and expertise to help investors harmed by stockbroker misconduct.