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New Update from Bates Compliance: Broker-Dealer Branch Office Compliance White Paper
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02-04-21

New Update from Bates Compliance: Broker-Dealer Branch Office Compliance White Paper

In May 2019, Bates Compliance published a review of the supervision, inspection and operational considerations for broker-dealer branch office compliance. Since then, FINRA has broadened its examination priorities, while the COVID-19 pandemic has heightened compliance risks. This updated white paper discusses the responsibilities placed on the supervisors of broker-dealer branches in light of FINRA's broadened priorities and recently updated guidance on remote supervision.

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FINRA Releases 2021 Report on FINRA’s Examination and Risk Monitoring Program
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02-02-21

FINRA Releases 2021 Report on FINRA’s Examination and Risk Monitoring Program

FINRA has announced the publication of the 2021 Report on FINRA's Examination and Risk Monitoring Program. The new Report combines and replaces two previously published annual reports, the Report on Examination Findings and Observations and the Risk Monitoring and Examination Program Priorities Letter.

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SEC Rewrites Rules on Investment Adviser Marketing
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01-08-21

SEC Rewrites Rules on Investment Adviser Marketing

Just prior to the new year, the SEC finalized significant changes to rules and forms governing advertising and cash solicitations under the Investment Advisers Act, replacing both the prior Advertising Rule and Cash Solicitation Rule with a single, broad, “modernized” marketing rule. The new rule also amends investment adviser registration Form ADV and the books and records rule to reflect the related changes. In this article, we detail key provisions of the new rule and how Bates will help your firm navigate and implement this significant rule change.

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FINRA is Reviewing Firms’ Systems and Procedures for Providing Customer Waivers/Rebates through Rights of Reinstatement (RoR) on Mutual Fund Purchases

12-01-20

FINRA is Reviewing Firms’ Systems and Procedures for Providing Customer Waivers/Rebates through Rights of Reinstatement (RoR) on Mutual Fund Purchases

FINRA is conducting a targeted review of brokerage firms' systems and procedures for providing customers waivers and rebates available through Rights of Reinstatement (RoR) on mutual fund purchases. As part of this review, FINRA will request each firm that receives this information request respond to certain questions with respect to the period of January 1, 2017 through June 30, 2020.

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SEC Allows Remote Inspections Through 2021

11-23-20

SEC Allows Remote Inspections Through 2021

On November 18, 2020, the SEC made effective FINRA’s proposed temporary rule amendment allowing remote inspections through December 31, 2021. The SEC regulatory action adopts temporary relief (Supplementary Material .17) under FINRA Rule 3110 (Supervision) by providing member firms the option to remotely complete inspection obligations for Calendar Years 2020 and 2021. FINRA stated that the change was a response to the operational challenges presented by the COVID-19 pandemic.

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This Week in Reg BI: SEC-FINRA Roundtable and Bates Compliance-Global Relay Webinar “REG BI - 120 Days On”

10-26-20

This Week in Reg BI: SEC-FINRA Roundtable and Bates Compliance-Global Relay Webinar “REG BI - 120 Days On”

Today, October 26, 2020, the SEC and FINRA staff will hold a remote public roundtable to discuss their observations on the implementation of Regulation Best Interest (“Reg BI”) and Customer Relationship Summary disclosure form (“Form CRS”) since mandatory compliance began on June 30, 2020. Following the program, on Wednesday, October 28, 2020 at 2 pm ET / 11 am PT, Bates Compliance will hold its own webinar with Global Relay to discuss “Reg BI - 120 Days On.”

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OCIE Warns Against Emerging Cyber Threat of “Credential Stuffing”

09-18-20

OCIE Warns Against Emerging Cyber Threat of “Credential Stuffing”

On September 15, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) issued an alert urging investment advisers and broker-dealers to review their customer account protection safeguards and identity theft prevention programs. The impetus behind the alert is an increase in the number of cyber-attacks using a tactic called “credential stuffing,” observed during recent examinations. OCIE also disclosed a number of practices firms are using to mitigate this emergent risk.

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SEC Amends Definition of “Accredited Investor”

08-31-20

SEC Amends Definition of “Accredited Investor”

In an effort to broaden investment opportunities in private funds, the SEC expanded the definition of “accredited investor” to include a host of “natural persons” and other entities that would not otherwise qualify under the current rigorous disclosure and procedural requirements. The revised definition is intended to increase the number of investors that will have access to private investments.

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SEC Issues COVID-19 Compliance Observations and Recommendations for BDs and IAs

08-17-20

SEC Issues COVID-19 Compliance Observations and Recommendations for BDs and IAs

On August 12, 2020 the SEC Office of Compliance Inspections and Examinations (OCIE) staff alerted broker-dealers and investment advisers to additional COVID-19 compliance risks. The new considerations are based on the “operational, technological [and] commercial challenges” raised by the public and private sector response to the pandemic. OCIE staff grouped their observations and recommendations into several categories—here’s what you need to know:  

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SEC Issues “Private Funds Adviser” Compliance Risk Alert

07-02-20

SEC Issues “Private Funds Adviser” Compliance Risk Alert

Investment advisers that manage private equity or hedge funds (“private funds advisers”) should review and enhance their compliance procedures to protect investors from (i) improper fees and expenses, (ii) conflicts of interest that may exist between the adviser and the fund, and (iii) the misuse of material non-public information (MNPI). That is the message communicated by an OCIE Risk Alert, published June 23, 2020. The Alert identified compliance deficiencies observed by SEC staff during recent examinations of private fund advisers.

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Reg BI & Form CRS Countdown: One Month to Go - Exams to Start July 1, 2020
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05-28-20

Reg BI & Form CRS Countdown: One Month to Go - Exams to Start July 1, 2020

The June 30th, 2020 implementation date for SEC Regulation Best Interest and the corresponding Customer Relationship Summary (Form CRS) is only one month away. At a recent SIFMA panel discussion covering a host of priorities amid COVID-19, FINRA legal, risk and supervision executives focused on some of the immediate concerns regarding Reg BI and Form CRS, including their examination focus and the suitability rule. Bates Compliance has the details.

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Bates Practice Leadership Insights: What Compliance Officers are Thinking About Now
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05-20-20

Bates Practice Leadership Insights: What Compliance Officers are Thinking About Now

In this first of a series of conversations with Bates Group practice leaders, we caught up with Robert Lavigne, Managing Director and Bates Compliance Practice Leader, and Hank Sanchez, Esq., Bates Compliance Managing Director and former SEC and FINRA regulator, to get an understanding of what they are hearing from compliance officers right now, as well as advice for compliance teams in the "new normal."

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