SDDCO Regulatory Services (SDDCO-RS) gives expert compliance guidance and onsite assistance to emerging securities firms and existing FINRA member broker-dealers. Our compliance consultants facilitate your startup and support ongoing adherence to all applicable requirements of the Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and other regulatory authorities.
We do not sell one-size-fits-all compliance publications or anything “off-the-shelf”, and clients confirm that our customized method works best. According to your business needs, we can be engaged for compliance service projects or retained for ongoing service.
Broker-Dealer Registration Services
Under Section 15 of the Securities Exchange Act of 1934, most “brokers” and “dealers” must register with the SEC and join a “self-regulatory organization,” or SRO.
To registers as a broker- dealer and conduct business, SDDCO will assist you to:
- File Form BD with the SEC
- Become a member of the SRO, FINRA (the Financial Industry Regulatory Authority)
- Become a member of SIPC (the Securities Investor Protection Corporation)
- Comply with state requirements as applicable, and
- Ensure that all “associated persons” satisfy their qualification requirements
FINRA Membership Applications
New Membership Application
If you plan to establish a new broker-dealer, partner with SDDCO-RS to streamline the painstaking process of preparing and filing your FINRA New Membership Application (NMA). We can help you accomplish the timely submission of a complete NMA including:
- A carefully constructed business plan
- Requisite standardized forms
- Various procedures manuals
- Biographies of your principals
- Preliminary financial statements
- Projections for first 12 months of fixed operating expenses
- Interface with FINRA examiners
- Responses to information requests
Requirements of Associated Persons:
- Form U-4: Associated persons of a broker-dealer include any partner, officer, director, branch manager, or employees performing similar functions. A broker-dealer must file a Form U-4 with FINRA for each AP who will effect transactions in securities. Form U-4 registers and fingerprints individuals and records their employment and disciplinary history.
- SRO Qualifications: APs must pass FINRA qualification exams, such as the general “Series 7″ exam and additional specialized exams. State qualifications may also apply.
Continuing Membership Application
If you plan to buy, sell or restructure your broker-dealer ownership or expand into additional business lines, call upon SDDCO-RS to manage your FINRA Continuing Membership Application (CMA) in accordance with NASD Rule 1017. We can:
- Lead you through the application process
- Draft your application letter, any additional procedures and process the required forms
- Help you gather and assemble the required FINRA information
- Respond to any additional documentation requests
Broker-Dealer Compliance Services
Retainer service options includes weekly, semimonthly or monthly onsite visits and interim support via phone, email, webinars and conference calls.
We begin each engagement by collaborating with management to develop an inventory of applicable compliance requirements within your firm. We then peg the status of each requirement and plan strategies to achieve ongoing compliance. Our retained compliance services include:
Working with Regulators
Whether part of your firm’s normal course of business or during your FINRA Examination, SDDCO-RS compliance professionals can assist your senior management by working closely with you or your firm’s legal counsel to draft correspondence with regulators. By interacting extensively with FINRA staff on client applications and sales practice examinations, our professionals have developed strong working relationships, which fosters efficient and effective communication with regulators. We understand how FINRA works and what is expected, and they know and trust our competencies and work products.
Registrations and Licensing
SDDCO-RS can serve as your FINRA Web CRD Administrator or assist your firm’s designated Web CRD Administrator to accomplish the following:
- Advise designated parties of relevant CRD requirements
- Perform the required annual review of FINRA Contact System
- Monitor regulatory element training requirements
- Facilitate exam scheduling, fingerprint cards and other CRD administrative requirements
- Assist with Blue Sky filings
Annual Compliance Meeting
SDDCO-RS can develop the relevant content for your annual compliance meeting and help your CCO deliver and document the meeting onsite. Relevant content includes a detailed agenda for the meeting, required disclosures to be completed by each attendee and time sensitive handouts to be discussed at the meeting.
Policies & Procedures
FINRA and the SEC require that policies and procedures are implemented within your company to help you accomplish your ongoing compliance with all applicable rules, which include FINRA, SEC, SIPC, MSRB and state rules relevant to your securities business.
Our onsite consultants can expertly support the foundation, modification and documentation of internal policies and procedures—the keystone of effective compliance. Through close contact with your supervisory staff, we can steer the development, customization and amendment of the following policies, procedures and manuals:
- Written Supervisory Procedures
- Anti-Money Laundering Procedures
- Continuing Education Program
- Business Continuity Plan
Broker-Dealers are expected to establish procedures whereby they test and verify their compliance with all applicable rules. SDDCO-RS can orchestrate your compliance with Rule 3012 regarding supervisory control systems as follows:
- Inventory all products or businesses
- Investigate your firm’s specific internal control requirements
- Identify gaps between industry rules and your existing supervisory procedures
- Review the compliance procedures and timetables expected of supervisors
- Suggest updating your procedures or adopting a new supervisory process
Disclosures & Certifications
SDDCO-RS can deliver customized attestation and disclosure forms to make known the following:
- Outside accounts & personal trading
- Outside business activities
- Private securities transactions
- Form U4 information
- Pre-dispute arbitration
Business Continuity Planning
Broker-Dealers are required to have a written business continuity plan (BCP) in place that identifies a firm’s procedures for responding to significant business disruptions. SDDCO-RS can work with management to develop an effective and efficient plan designed to enable your firm to meet its obligations to customers.
SDDCO-RS can provide the direction your staff needs to keep current with FINRA member continuing education training requirements. Call on us to design an achievable program, which includes:
- A Firm Element Needs Analysis to identify the training needs of your firm’s staff
- A Firm Element Training Plan to describe the specific training and method of delivery