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Tracking and Reporting for SEC and FINRA Compliance Documents

November 25, 2014

Not only do many types of SEC and FINRA documents have to be retained, but the review and evidence of the approval process must be retained as well. 17a-4 offers workflows for compliance that provide for tracking and reporting. 

There are many different types of SEC and FINRA compliance documents which require a principal to review and evidence approval of a report, sales material or business activities.  For example, FINRA’s Rule 3270, Outside Business Activities of Registered Persons, cites:  A member must keep a record of its compliance with these obligations with respect to each written notice received and must preserve this record for the period of time and accessibility specified in SEA Rule 17a-4(e)(1).  However, evidence of tracking and review for regulated documents is an often neglected element of compliance requirements.  As well, these documents are often delivered to compliance in many different formats and are typically retained on either fileshares or document management systems that are not in compliance with SEC Rule 17a-4.  For instance, adding a comment to a document on Sharepoint does not comply with SEC retention requirements.  17a-4 provides compliance workflows that account for tracking and review retention requirements when appropriate.

17a-4 has worked with over 500 financial clients to build systems which provide efficient and cost-effective solutions for managing many different types of e-messaging, collaboration and document workflows.  We have developed these workflows to comply with SEC and FINRA regulations as well as work seamlessly within organizations.  Below we have modeled the steps for both international research and registered persons outside business activities.  This process is easily adapted to other compliance workflow processes.

FINRA’s Rule 3270, Outside Business Activities of Registered Persons

  1. All Registered Persons will email information on a new Outside Business Activities to an email address;
  2. New emails will start a Review Task for compliance;
  3. A compliance officer will either add a comment to the workflow or call the Registered Person to discuss the activity;
  4. Each new discussion or document will be added to the workflow along with confidential compliance notes;
  5. If there are activity restrictions, those will be noted in the workflow. An email of that restriction will be sent to the Registered Person with an alert indicating that the person must approve the restriction and notify compliance of any change in the description of the Outside Business Activity.

SEC Rule 15a-6, Registration Requirements for Foreign Broker-Dealers

  1. Any new research report from a foreign broker-dealer will be email to an email address;
  2. New emails will start a research report review task;
  3. A principal of the U.S. broker-dealer will review the research report, list any compliance issues and, once complete, will approve the research report for U.S. distribution;
  4. Updates to the research report will be treated as versions of the original research report so that change tracking can be captured and retained;
  5. Once approved, the research report can be email to institutional sales people or moved to a folder which represents approved research reports.

We have also developed workflow modules for:

  • FINRA 2210 – Institutional sales material review and permissioning
  • FINRA 4530 – Customer complaints and filings
  • Foreign Corrupt Practices Act – Agent capture of gifts and reimbursements

Millbrook, NY ( PRWeb ) November 25, 2014