SEC to Hold National Compliance Event for Broker-Dealers

The SEC announced the opening of registration for its National Compliance Outreach Program for Broker-Dealers that will take place in Washington D.C. on April 9.

The event is sponsored by the SEC's Office of Compliance Inspections and Examinations in coordination with the SEC's Division of Trading and Markets and the Financial Industry Regulatory Authority (FINRA). It provides a forum for open discussions about effective compliance practices for broker-dealers and will focus on topics of interest to compliance, risk, and audit officers of large broker-dealers with multiple and complex business lines.

"To be effective, compliance and ethics programs cannot exist in silos. They need to be ingrained in the DNA of the organization and the decision-making framework of the organization. They need to be part of the way business is done," said Carlo di Florio, Director of the SEC's National Examination Program. "Compliance and risk management programs add tremendous business value. They protect the business. They enhance the brand. They ensure that reputation is protected. Our National Compliance Outreach Program is one of the ways that we try to support and enhance the compliance and risk management functions of firms."

FINRA Member Regulation EVP Susan Axelrod added, "FINRA is pleased to continue the partnership with the SEC to provide this opportunity for broker-dealer compliance professionals and regulators to foster two-way communication and work together to protect investors. Given the pace of change in the industry, face-to-face meetings of this kind are more valuable than ever."

For more information on the even, visit SEC to Hold National Compliance Event for Broker-Dealers

Do You Need to Register? Foreign Investment Firms Fined By SEC

If you are doing business in the United States, you need to follow the US securities laws, regardless of where you are located. While there are exemptions from registration and other exceptions that may be available, all firms need to examine the issue and doing business in the US is very broadly interpreted. The costs of failing to comply with the state and federal securities laws can be very costly, as four foreign financial services firms just learned.
The SEC announced charges against four financial services firms based in India for providing brokerage services to institutional investors in the United States without being registered with the SEC as required under the federal securities laws. The four firms agreed to pay more than $1.8 million combined to settle the SEC’s charges.
According to the SEC’s orders against the firms, they engaged with U.S. investors in some of the following ways despite being unregistered broker-dealers: Sponsored conferences in the U.S. Had employees travel regularly to the U.S. to meet with investors. Traded securities of India-based issuers on behalf of U.S. investors Participated in securities offerings from India-based issuers to U.S. investors.
Almost two million dollars in fines for failing to register, a process that can be costly, but certainly not two million dollars worth of costly. Now add to that the possibility that their clients may have claims against the firms because they were not registered  and this becomes a very costly oversight.
The full details are at the Commission's website - SEC Charges Four India-Based Brokerage Firms with Violating U.S. Registration Requirements; If you have questions about the registration status or requirements for any financial services firm, foreign or domestic, give us a call or email me at astarita@beamlaw.com. We have been representing financial firms across the country in compliance and registration matters for decades.

Related articles

• SEC Auditor Case Seen Jeopardizing Chinese U.S. Listings (bloomberg.com)
• SEC charges two in Georgia prime bank scheme (bizjournals.com)