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Article
Publication date: 3 July 2017

Matthew T. Wirig and Kate S. Poorbaugh

To summarize guidance from the Securities and Exchange Commission’s (“SEC”) Division of Investment Management regarding Rule 206(4)-2 (the “Custody Rule”) under the…

Abstract

Purpose

To summarize guidance from the Securities and Exchange Commission’s (“SEC”) Division of Investment Management regarding Rule 206(4)-2 (the “Custody Rule”) under the Investment Advisers Act of 1940.

Design/methodology/approach

This article summarizes the SEC’s guidance on “inadvertent custody” created by broad authority in custodial agreements, custody created by standing letters of instruction, and adviser authority to transfer funds or securities between two or more of a client's accounts.

Findings

This article concludes that firms should review their existing client custodial agreements, standing letters of instruction and other arrangements carefully to determine whether they have custody and whether additional action is necessary.

Originality/value

This article contains information on the Custody Rule and related SEC guidance from experienced securities and financial services regulatory lawyers.

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Article
Publication date: 4 September 2017

Matthew T. Wirig and Kate S. Poorbaugh

To summarize recent FINRA guidance on social media and digital communications published in Regulatory Notice 17-18.

Abstract

Purpose

To summarize recent FINRA guidance on social media and digital communications published in Regulatory Notice 17-18.

Design/methodology/approach

The intention was to provide a brief summary of the recent FINRA guidance on social media and digital communications published in Regulatory Notice 17-18 along with previous guidance in Regulatory Notices 10-06 and 11-39.

Findings

The new guidance focuses on a number of areas of digital communications including text messaging, personal communications, hyperlinks and sharing, native advertising, testimonials and endorsements, correction of third-party content and BrokerCheck links.

Practical implications

Firms should review this new guidance alongside existing FINRA guidance and their current social media and digital communications practices. Where firms observe deficiencies in their existing practices, adjustments should be made before they find themselves the subject of a FINRA investigation, examination or enforcement action.

Originality/value

Practical explanation by experienced financial services lawyers.

Details

Journal of Investment Compliance, vol. 18 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 6 July 2015

Matthew T. Wirig

– To summarize the Financial Industry Regulatory Authority, Inc. (“FINRA”) 2015 Regulatory and Examinations Priorities Letter.

Abstract

Purpose

To summarize the Financial Industry Regulatory Authority, Inc. (“FINRA”) 2015 Regulatory and Examinations Priorities Letter.

Design/methodology/approach

Provides a brief summary of the general compliance and supervisory challenges described by FINRA. Highlights key sales practice concerns raised by FINRA. Briefly summarizes FINRA’s 2015 key financial and operational priorities. Summarizes FINRA market integrity focuses for 2015. Encourages firms to consider the FINRA 2015 regulatory and examination priorities alongside the Securities and Exchange Commission (the “SEC”) examination priorities for 2015 as they review their policies, procedures and business activities.

Findings

FINRA’s 2015 Regulatory and Examinations Priorities Letter focuses on: key areas FINRA has observed contributing to member firm compliance and supervisory deficiencies, its observation of an increase in firms failing to file timely responses to information requests in connection with examinations and investigations, key sales practice issues, financial and operational issues, and market integrity matters.

Practical implications

Firms should review these priorities alongside the SEC’s examination priorities for 2015. Where firms observe deficiencies in their own practices, adjustments should be made before they find themselves the subject of a FINRA or SEC investigation, examination or enforcement action.

Originality/value

Practical explanation by experienced financial services lawyer.

Details

Journal of Investment Compliance, vol. 16 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

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