What Brokers Need to Know to Make States Happy
The North American Securities Administrators Association is exceedingly active, coordinating many broker-dealer examinations by a variety of state regulators.
NASAA has found that the greatest number of violations involved books and records, and supervision. NASAA's report recommended 10 best practices so that broker-dealers may develop appropriate compliance practices and procedures. In particular, NASAA recommended developing compliance procedures in, among other things, suitability; supervision; branch office audits; exception reports; outside business activities; selling away; advertisements and sales literature; correspondence; customer complaints; and senior customers.
Although following this advice is not a "get out of jail card," it does provide broker-dealers with a road-map for developing appropriate procedures to appease state regulators.