General Broker Dealer Supervision

Why Should You Attend:

In the past year, several major brokerage institutions have been fined by FINRA for have inadequate supervisory policies and procedures in place to supervise the activities of registered persons that conduct business on behalf of their firms and their clients. The violations noted include such areas as qualification of registered employees, sales practices, email retention and review, transaction review and inadequate oversight of business activities in branch locations. Supervisory personnel are not only tasked with supporting their firms’ productivity goals; they are also responsible for fully understanding the activities of the registered persons they supervise and identifying issues before they become rule violations.

This webinar highlights what member firms’ supervisory personnel should generally be aware of when overseeing the business activities of the registered employees. (Many of these areas can be sub-categorized into specific training modules.) The supervisory elements outlined in this course are based on NASD Rule 3010 and related notices, best industry practice and supervisory experience. This webinar will discuss several major elements of the supervisory system: written supervisory procedures, internal inspections, supervision of registered representatives, review and retention of correspondence, qualification and registration of representatives and the key requirements within each of them.

The instructor will also examine significant regulatory and disciplinary actions to demonstrate how a reasonable and sound supervisory program, tailored to the needs of the firm’s business, can prevent supervisory failures.

Areas Covered in the Webinar:

• The Broker Dealer Supervisory System
• Designation of OSJs and branch office locations
• Designation of Principals
• Written Supervisory Procedures
• Internal Inspections
• Supervision of Registered Representatives
• Review and Retention of Correspondence
• Qualification of Registered Representatives
• Recent Disciplinary Actions

Who will benefit:

• Broker Dealer Supervisory Principals
• Business Managers
• Compliance Personnel
• Business and Operational Risk Managers
• Staff with roles and responsibilities in compliance departments.

Instructor Profile:

Andrew Byer, has nearly 14 years of broker dealer compliance experience, most recently as a consultant to Liquidnet, Inc. Mr. Byer has also held senior compliance positions with Pimco LLC, BlackRock, Inc. in New York, NY and Bisys Fund Services, Inc. in Columbus, OH, where he served as Chief Compliance Officer with the firm’s mutual fund distributor broker dealer. He holds FINRA Series 7, 24, 51 and 63 licenses. He received a Master of Public Administration degree from The Ohio State University and a Bachelor of Arts from The University of Wisconsin – Madison.

Topic Background:

NASD Rule 3010 mandates that “each member shall establish and maintain a system to supervise the activities of each registered representative, registered principal, and other associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable NASD Rules”. This rule in part lays the foundation for oversight of a member firm’s business activities and aids compliance with additional rules that govern business conduct. If the supervisory system is appropriately tailored to the firm’s business and risk model and effectively implemented, it can help facilitate compliance and enable the business to succeed. However, inadequate supervision of its business practices can place a firm at risk for not only regulatory violations but also jeopardize its relationships with its clients.

In recent years, FINRA has issued guidance in the form of Notices to Members and its annual Examination Priorities letter as part of its continuing effort to provide member firms, particularly smaller firms, with guidance on complying with the rules that govern their conduct. However, recent FINRA disciplinary actions concerning violations of Rule 3010 have resulted not only in fines to member firms, but also fines and/or suspensions levied against the registered persons who committed the violations and their supervisory principals. Because business and regulatory environments are fluid, it is necessary to insure that adequate supervision is given high priority in a firm’s governance.

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