IA Compliance: The Full 360° View East 
March 7-8, 2019 | Washington, D.C.

UPCOMING WEBINARS

Conquering Current Compliance Challenges
Feb. 13, 2019 | 2:00 - 2:30 PM EST

Strategies to Make this Year’s Form ADV Update a Breeze
Feb. 19, 2019 | 2:00 - 2:30 PM EST
 
RECORDED WEBINARS

Conquering Current Compliance Challenges
Recorded: January 16, 2019 
  Includes: 23 Best Practices, 5 Peer-tested tools and 15 No Action Letters

The SEC Examinations Priorities Handbook
Includes: 28 Best Practices, 20 Document Request Letters and 6 OCIE Risk Alerts

Cybersecurity Strategies to Ensure SEC Compliance, 2nd Edition
Includes: 24 Best Practices, 16 Tools, 4 Risk Alerts and IM Guidance

 
CONFLICTS OF INTEREST OVERVIEW
Conflicts of interest are an SEC and FINRA priority and have been addressed through rulemaking, oversight and enforcement action, FINRA notes.  The regulator has stated that given conflicts’ pervasiveness and potential to cause customer harm, it will continue to assess broker-dealers’ conflict management practices and the effectiveness of those practices in protecting customers’ interests.
 
Conflicts are one of the five challenge areas that FINRA has identified that if not addressed can compromise the quality of service provided to customers and contribute to compliance and supervisory breakdowns.  The SRO notes that conflicts are a contributing factor to many regulatory actions it and other regulators have taken against broker-dealers and associated persons.  The importance of firms moving to identify and mitigate conflicts of interest has been underscored by FINRA.
 
FINRA rule 2010 (Standards of Commercial Honor and Principles of Trade) states that a firm “in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.” In addition, FINRA rule 2020 (Use of Manipulative, Deceptive or Other Fraudulent Devices) provides that no firm “shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.”

Conflicts’ focus areas

Recent trends and focus areas tied to conflicts have included:
 
  • Firms’ failing to adequately address conflicts of interest by offering favorable rese4arch in connection with potential investment banking business;
  • Market access customers self-monitoring and self-reporting suspicious trading; and
  • Fee and compensation structures that lie at the heart of many conflicts an which can compromise the objectivity registered reps provide to customers.

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