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Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

Do You Want To Know What Keeps The Regulator Up At Night

Posted in Broker-Dealer Regulation, Compliance and Supervision, Financial Industry Trends, FINRA Compliance, FINRA Enforcement, Investment Adviser Regulation, SEC Compliance, SEC Enforcement, Social Media

confusion.jpgAt a regulator’s round table during a recent National Society of Compliance Professionals meeting, the regulators framed out those issues that are keeping them up at night.  The issues include:

  1. The increasing complexity of investment products.
  2. Social media beyond things like Twitter or LinkedIn.
  3. Cyber security.
  4. Cyber fraud; i.e. hacking into customer accounts.
  5. AML issues where broker-dealers are connected to banks.

This panel also noted that one of the more common deficiencies being seen is the lack of suitability analysis when it comes to complex products.  In addition, they noted that there have been more exceptions when it comes to proper supervision.

It almost goes without question that, if the regulators are focused on certain areas, you need to share that focus.  Revisit your WSPs and practices and procedures.  Make the necessary changes, and avoid sleepless nights.