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Welcome back to the Compliance In Context Podcast! On today’s episode, we welcome in Jennifer Selliers, Director of Internal Compliance for the State of Tennessee Department of Treasury and current NSCP board member, for an authentic look at how to find your own career path in compliance (and everywhere).  In our Headlines section, the SEC seeks comment on Broker-Dealer and Investment Adviser Digital Engagement practices, we look to we look at a recent SEC Investor Advisory Committee meeting to demonstrate contrasting views on market regulation, and close with a quick update on the SEC’s telework timeline. Finally, we’ll wrap up today’s show with another installment of Outtakes, as we look to showcase how even an exempt reporting adviser can find itself in hot water with the SEC and its LP investors, particularly where an auditor isn’t involved   Headlines SEC seeking comment on Digital Engagement Practices (DEPs) SEC Investor Advisory Committee meeting offers contrasting views on market regulation from SEC Chair Gensler and SEC Commissioner Peirce SEC recently updated its COVID-19 Telework Operations Status   Interview How to stay motivated in your compliance job? What’s better to focus on in your career—technical or professional development? What’s the “right” degree or accreditation to have as a compliance officer?  Were there certain things that you considered when you were coming up? What are the best ways to onboard a new compliance employee? As a manager, how are you able to effectively able to lead a team during this challenging environment? Discuss the benefits of the apprenticeship model Goal Setting / Professional Development – 3-year professional development plan   Outtakes Exempt Reporting Adviser and related private fund were investigated by the SEC for securities laws violations When recommending or doing due diligence on private fund investments, make sure there is an auditor involved.   Quotes: “I think one of the things that helps me stay motivated is remembering that I’m responsible for driving my own career, whether that’s in compliance or if that’s a whole career shift (and I know there’s a lot of people who are contemplating that and taking that big leap). But I own that. That’s mine.” - Jennifer Selliers “There’s people in my life that are my cheering squad, right? When I need that pick-me-up, I know I can call them and they’re going to be like, ‘You know, buck up camper! You got this! You just take that bull by the horns! Run with it! You’re making the right decision!’ right? And then there’s some other days when I feel like, ‘I’m feeling like I need to do this. I need to talk this out with somebody. And I’ve got another group of people that’ll be like, ‘I don’t know what you’re thinking but you’ve got to take that back to the table.’ [laughs] Right? You can see those types of people, along with other types of people that just help you build and round out your professional and your career goals.” - Jennifer Selliers    Resources: Compliance in Context Contact Form  Compliance in Context, LinkedIn  Twitter: @compliancepod  Compliance in Context  

Welcome back to the Compliance In Context Podcast! On today’s episode, we we welcome in Melissa Loner, the Executive Vice President of Advisor Services at Premiere Wealth Management and current NSCP board member.  With a background in compliance but with a focus now on running the business, Melissa is the perfect person to share with us all the best practices when it comes to fees, expenses, and firm compensation, and the types of questions should be asking themselves when setting up a billing system. In our Headlines section, we examine yet another FINRA warning about a new Phishing Email Campaign targeting BD and RIA firms and discuss some changes in leadership at the CFTC. And finally, we’ll wrap up today’s show with another installment of What’s On My Mind, where we explore how a key element of acoustic design could be a critical component of your defense during an SEC examination.     Headlines FINRA recently alerted members to another phishing campaign involving the use of fraudulent FINRA domain names: “@finrar-reporting.org,” “@Finpro-finrar.org,” and “@gateway2-finra.org.” CFTC Commissioner Brian Quintenz who recently announced that he will be leaving the office at the end of August 2021. Quintenz has been a notable crypto advocate for the duration of his term In his statement upon departure, he highlighted his work on cryptocurrency issues   Interview In your mind, what are the biggest challenges with billing and issues around fees and expenses? What are some of the best ways an adviser can mitigate these challenges and issues? NSCP Compliance Forum discussing the threshold for refunds to be paid out Should firms need to disclose all the situations in which they’re not going to refund fees under a certain amount? What were the lessons learned from the Share Class Disclosure Initiative?  What are some best practices around documentation? What types of activities are included here? What are hallmarks of a successful billing program?   What’s on My Mind The history of unwanted sound The job of acoustic design Using acoustical privacy as a key line of defense during an SEC exam   Quotes: “The best thing I can tell people is processes and disclosures. As you were asking the question we talked a little bit about, ‘Is there a monthly fee or a quarterly fee? Is it charged in advance or is it charged arrear? Is it charged on a 360 day or a 365 day? Is it refunded at what period of time?’ So there’s a lot of what ifs that come into place and I think that’s what gets people hung up.” - Melissa Loner “The more flexibility you have, which you want to have for advisors and advisors want to have that for clients, but it puts in a larger risk to not have everything that’s needed to be done. I know you’re going to ask about this later but it goes to disclosure, it goes back to processes, it goes back to consistency.” - Melissa Loner  “Disclosures is a big one because that’s the first place that the regulators are going to go. They’re going to go to your disclosure and then they’re going to match that up to the billing that you’ve been doing. And, in addition to that, they’re also going to match that up to your supervisory procedures or your clients’ manual or your operations procedural to ensure that you’re following that consistently.” - Melissa Loner    “So one of the best practices that I largely suggest is to have an annual process where you look at how your billing is actually happening and then review all of those documents to ensure that they’re actually reflective.” - Melissa Loner    “You’ve got to make sure that the trifecta of your disclosures, and your brochures, and your advisory agreements match what you have for your internal compliancies and procedures and your internal controls. And if you can marry those three things in a way that is consistent, it’s at least going to, hopefully, give you a foundation for success.” - Patrick Hayes    Resources: Compliance in Context Contact Form  Compliance in Context, LinkedIn  Twitter: @compliancepod  Compliance in Context  

Welcome back to the Compliance In Context Podcast! On today’s episode, we have the distinct pleasure of chatting with Jim Downing, the current Chair-Elect of the NSCP Board of Directors and current Chief Compliance Officer for Morningstar, who shares with us his Five Fundamentals of Compliance, and provides some fantastic insight into how best to run a compliance program that has multiple business lines and a global customer base. In our Headlines section, we do another dive into some recent buzz and regulatory activity surrounding cryptoassets, we’ll cover a defense of family offices from a couple key regulators, and finally, we’ll wrap up today’s show with another installment of What’s On My Mind, where in the spirit of this year’s Olympic games, we look back at a quote from the greatest sprinter of our generation to help provide peace of mind to compliance officers everywhere, no matter the stage in their career.    Headlines Letter from Senator Warren to SEC Chair Gensler Expanding the authority of the SEC or the CFTC to regulate cryptocurrency exchanges Bloomberg Op-Ed from SEC Commissioner Hester Peirce and CFTC Commissioner Brian Quintenz focused on the regulation of family offices Examining the risks involved in the failure Archegos Capital Management   Interview How to build a diverse and global compliance program Developing a culture of compliance Understanding the Five Fundamentals of Compliance Identifying and mitigating conflicts of interest in multi-faceted firms   What’s on My Mind Quote from Usain Bolt on setting the proper expectations Understanding and overcoming the challenges in running a compliance program   Quotes: “One of the first things to do is to check your ego at the door. So when it comes to a global compliance program, I have to realize what I don’t know. And so when we look at, let’s say, Aon or my current position at MorningStar, there were several jurisdictions where I could--in no way--consider myself an expert. So what’s really important there is you make sure you have the right talent onboard.” “It’s so important to, number one, when you first get there and you first start meeting these executives or heads of sales or product, or operations, or finance, or all the various compartments, is to really take some time and to sit down and to listen to them.” “Because that’s the advice that we're giving the business on kind of a day-to-day basis you know. When they come to us “Hey what should I do about this?” or “I'm thinking about doing this, what do you think?” And that advice should be drawing from all of these five different fundamentals, you know it should be drawing from where's our where's what's our most risky behavior? It should be drawing from what do our policies and procedures say? It should be drawing from, well, you know, we tested that process and they’re talking about they want to increase the capacity of that and that wasn't very good or hey we had a recent exam or there’s an outstanding issue or whatever it is.”   Resources: Compliance in Context Contact Form  Compliance in Context, LinkedIn  Twitter: @compliancepod  Compliance in Context  

Welcome back to The Securities Compliance Podcast! We have a fantastic episode ahead that shines a light on a very difficult topic—ESG. To do this, we continue the third installment of our Lessons From the Front Lines series. Much like our regular shows, this series will provide same excellent content to help you put Compliance In Context, but will deliver that content in a more narrative form—like a fireside conversation with an industry pro. The show will focus on providing practical advice and takeaways that focus on real-life, tough lessons other industry professionals and regulators have learned on the front lines of our industry. To help guide us through today’s conversation, we welcome in David Curran, the Chief Sustainability and ESG Officer at Paul Weiss. For anyone wanting to learn more about ESG or struggling with implementing ESG policies inside your firm’s compliance program, you won’t want to miss this episode. Listen in as David provides invaluable insights from his experiences on the front lines of the ESG space. And if you have an idea for a future Lessons From the Front Lines episode, reach out to us on LinkedIn and Twitter or at complianceincontextpodcast.com.  We’d love to hear from you!   Interview Reviewing the frameworks of ESG How can we demysitify ESG? Why do firms struggle with ESG so much? Having a technology process to address ESG controls Biggest challenges in moving the ESG conversation forward How best to respond when you identify a deficiency Detailing the attitude shift on ESG in the investment management space   Quotes:  “[I]f you are taking a position on something that you believe in, that is essential to your corporation terms of its commitment, how are you governing it is really the essential issue. So to demystify it, for example, with compliance and legal executives, is to think of it like a compliance and legal regime. Governance is governance and governance means, how do you have a policy and procedure? How do you track, measure, monitor, and report on progress against these obligations? It's not any more complicated than that.” “[Governance] is at the core of virtually every major corporation’s business agenda today. It is not esoteric. It is not out in left field. It is existential.” “And so the demystification is to take it into its component parts. And part of that is to disassemble ESG, look at the governance part, flip the acronym and say, ‘Whatever you’re doing in the S category, whatever you’re doing in the E category, how are you governing them?” Because if you're not governing it, it doesn't get done.”    Resources: David Curran, Paul, Weiss, Rifkind, Wharton & Garrison LLP Compliance in Context Contact Form Compliance in Context, LinkedIn Twitter: @compliancepod Compliance in Context

Welcome back to the Compliance In Context Podcast! On today’s show, we have the distinct pleasure of chatting with Patty Cushing, Director of Compliance at the NFA, for an insider’s look at the examination process with the NFA, new areas of focus for the SRO, ideas around remote supervision, and much more. In our Headlines section, we do a deep dive into the recent buzz and regulatory activity surrounding cryptoassets, and finally, we’ll wrap up today’s show with another installment of the What’s On My Mind segment, where we look at the impact of gamification on the investment industry and the potential for new regulation.   Strap in for another informative and exciting episode!    Topics:   Headlines Timeline of regulatory activity surrounding crypto and digital assets Views from SEC Chair Gensler Identifying the risks and opportunities in crypto El Salvador becomes the first country in the world to adopt Bitcoin as legal tender   Interview Background and mission of the NFA. The NFA examination process. The importance of educating member-firms. New NFA initiatives for 2021. Trends in enforcement How the NFA adjusted to COVID-19 work restrictions. Thoughts on remote supervision   What’s on My Mind Reviewing the issue of Gamification and its impact on the market Finding the balance between investor protections versus overregulation   Quotes: “Our mission is officially to safeguard the integrity of the derivatives markets by and protect investors and ensure that our Members are meeting their regulatory responsibilities” “It really has been a focus my entire career and it started from the top, I mean our Presidents and CEOs say to us, you know, one of our functions is education, and that includes Member education. If our if our mission is to safeguard the integrity of the derivatives markets and protect customers, the best way to do that is to have Member firms who are in compliance with the rules and regulations. Most Members want to do the right thing and so it's our job to make sure they understand what the rules and regulations require and if they do it. But it's also our job for those firms who don't want to follow the regulations that we identify them quickly and get them disciplined.” “We’ve been successfully doing our jobs remotely and these inspections have been going well remotely. So, do we have to go back to what things were like pre-pandemic?”   Resources:  Compliance in Context

Welcome back to the Securities Compliance podcast. On today’s show, we do a deep dive on the 2021 Investment Adviser Section Report from the North American Securities Administrators Association highlighting 2020 activities for NASAA and its broader application to the compliance profession.  For our interview segment, we welcome in Lilian Morvay to provide our listeners with valuable insights on the impact of insurance on compliance and how varying types of insurance (D&O, E&O, Cybersecurity, Professional Liability Insurance) affect how broker-dealers and RIAs are doing business today.  Finally, we’ll wrap up today’s show with another installment of the History Has Your Back segment, where we look back at the life of fireman hero Ed Pulaski, and the importance of finding the right tool.    Headlines NASAA April 2021 Investment Adviser Section Report highlighting 2020 activities Metrics surrounding state registrants Model Rule on Written Policies and Procedures Compliance Grid Cybersecurity Checklist and additional guidance   Interview What is the purpose of insurance and the importance of risk transfer? Detailing different types of insurance impacting broker-dealers and RIAs The intricate details surrounding cybersecurity insurance What to consider when purchasing professional liability insurance What do you do if you have a claim?   What’s on My Mind   Reviewing the life of hero firefighter Ed Pulaski The Pulaski Axe Why having the right tool can make all the difference   Quotes: “One thing to consider from a client perspective, do you want to do business with a company that has not protected itself with a policy?”  “If you think about have professional companies protect themselves, think about yourdentist, think about your doctor, think about your attorney, think about your accountant—these individuals are providing a professional service, and there are times when they will commit a negligent act; they will inadvertently cause injury to their client. And the clients, have the opportunity to recover any damages or any losses related to that injury. Those services are insured by professional liability policy. Professional liability insurance policies are also available to companies that are in the financial sector—broker dealers, registered investment advisers.”  “It’s very important for broker-dealers when they are considering pursuing professional liability insurance, number one, to make sure that they have an insurance broker who’s very familiar with that type of policy.” “Fortunately, there are a number of carriers that are extending coverage for broker-dealers and RIA’s for cyber.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast! Today’s show is going to be a great one.  In the Headlines section, we’ll review recent recommendations from multiple SEC Commissioners on how to improve access to private capital.  For our interview segment, we have the distinct pleasure of speaking with Mark Kim, CEO of the Municipal Securities Rulemaking Board about the exciting developments happening at the MSRB, particularly on the technology and data side of the industry.  Finally, we’ll wrap up today’s show with another edition of Outtakes where we look at a Ponzi scheme and related emergency enforcement that unfortunately for the investors involved, wasn’t something that could only be made in Hollywood.   Headlines SEC Commissioners weigh in on how certain underrepresented founders and investors can get access to capital Commissioner Lee suggested the SEC evaluate how its regulations impact such communities Commissioner Peirce recommended that the SEC provide greater flexibility to the accredited investor definition and individuals serving as “finders”   Interview The mission of the Municipal Securities Rulemaking Board. The pillars upholding the MSRB. Providing infrastructure to MSRB The business case for cloud migration Data privacy and information security Transition away from LIBOR and related challenges ESG in the municipal securities market   Outtakes SEC issued emergency enforcement action against an alleged Ponzi scheme straight out of Hollywood   Quotes: “But that's not the only thing that Congress mandated us to do. Reading the Exchange Act, Congress also mandated the MSRB to establish information systems that promote a fair and efficient market, that facilitate capital formation. And those information systems, is what I mean by our core pillar of technology. It's the technology systems that undergird the market.” “Technology is fundamentally intertwined with compliance.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast!  As we kick off Season 2, we begin by reviewing a recent report from the Congressional Research Service looking at the SEC’s current guidance on ESG and help break down an incredibly challenging couple months in this area.  For our feature interview, we welcome in New York City Attorney and compliance expert, Richard Chen. Together we discuss the practical tilt of running an effective compliance program and how compliance officers can be more productive.  To wrap up the first episode of Season 2, we offer another installment of the History Has Your Back segment where we look back at the dating life of Warren Buffett, a quote from the most famous citizen of Motunui, and a good lesson in both life and compliance.     Headlines CRS Reviews SEC Disclosure Policy and Practice on Climate Risk Recent Timeline of SEC statements regarding ESG Future state of ESG and avoiding regulation by enforcement   Interview Setting priorities using the Eisenhower principle. Compliance calendars and time management. Identifying the Proper Allocation of Resources: Automation and the use of technology Cutting and delegating compliance responsibilities Collaborating with firm leadership and other business units How CCOs can protect themselves Fostering a culture of compliance within your organization   History Has Your Back Pitfalls in the dating life of Warren Buffett Navigating the separation between work and personal life   Quotes:  ““I think that one of the helpful frameworks I use is called the Eisenhower Principle, which categorizes tasks based on whether they’re important or urgent.” “...As compliance professionals, we are collaborative. We all want to get to the same place and so, it’s important for us to each put in what we know best about what’s going on, in order to perform effectively.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast!  In today’s bonus episode, we preview some of our fantastic Season 2 guests and look back at some of the amazing moments from Season 1. The even better news?  The first full episode of Season 2 drops later this week.  Let’s light this candle!   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast! In the final episode of Season 1, we begin by discussing recent remarks from SEC Commissioner Peirce regarding the Game Stop situation and how it might impact the industry moving forward, as well as a warning from securities regulators to help raise awareness about the threats of social isolation and investment fraud. For our feature interview, we welcome in former NSCP Board Member Rob Tull for an in-depth conversation focusing on the stress and demands inherent in being a legal and compliance professional that can lead to personal and career burnout, and what you can do to reclaim your sanity and energy, and even increase your creativity for problem-solving.  Finally, we’ll wrap up today’s show with another installment of the What’s On My Mind segment, where we do a deep dive on newborn babies, sleep deprivation, and compliance.   Headlines Commissioner Peirce Reaffirms SEC Mission to improve the way markets work and to make them work for more people in Light of GameStop SEC, NASAA, FINRA raise awareness regarding social isolation and Rrsk of investment fraud   Interview Demands of being a legal/compliance professional can lead to personal and career burnout Understanding the causes and impact of stress Managing the challenging expectations of compliance professionals. The fallacy of stress Stressful environments and the impact on decision making Getting comfortable with risks and deep water survivors Best practice recommendations to stay grounded and increasing your creativity for problem-solving   What’s on My Mind Newborn babies and the notion of banking sleep Acclimating yourself to a stressful or challenging environment Training your compliance program to perform at its best   Quotes: “Stress is actually a form of a threat response.” “Deep water survivors are the kind of people that if you were at the beach, they seem like the crazy person that swims way past out the breakers and you're just like “Where are you going? You’re going to drown.” And what I found in people that are like that is that they have an equation for risk which basically says my risk of a problem exists in the first 10 feet of water. Everything else below that is irrelevant. If I solve the top 10 feet of water I'm not drowning, so it doesn't matter how deep the water is. And so that got me thinking about in risk solving...you get so wrapped up in the details that you forget the fundamentals, which is if I do these core things at the top—and again if I just rely on compliance principles, not necessarily the specifics of the rules, but if I know my principles, and I can nail my principles down—then I shouldn't have to worry about how deep the risk is, if I can do the basics, I will survive.  It might not be pretty, but I'll survive.” “So what I found for me is when we're stressed out, we're running on depleted resources. And not only that there's a burnout factor, and it's like it's a question of “What are you willing to lose in the process of burning out?” And, we have to, we have to be willing to step out of that situation.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast! On today’s show, we continue our Lessons From the Front Lines series. Much like our regular shows, this series will provide same excellent content to help you put Compliance In Context™, but will deliver that content in a more narrative form—like a fireside conversation with an industry pro. In this way, the Lessons From the Front Lines series will provide you with practical advice and takeaways that focus on a real-life, tough lessons other compliance professionals and regulators have learned on the front lines of our industry.  To help guide us through today’s show, we welcome in Ed Wegener, the former Senior VP and Midwest Regional Director of FINRA to discuss some real lessons learned on the front lines of the investigation and enforcement process.   Topics: Reviewing the life cycle of a regulatory investigation Analysis of findings from routine examinations, cause examinations or enforcement investigations. Use of data analytics in the investigation process Conclusion of the Investigation Referral to enforcement and escalation of findings Enhanced focus on the impact the supervisory process and requisite due diligence of products, OBAs, private transactions, borrowing from customers, etc. Discussion of policies and procedures and related training protocols How does the firm monitor for compliance with its policy? Reviewing the FINRA 2021 Annual Regulatory and Exam Priorities Industry innovations to enhance the process of investigations and enforcement   Quotes: “When they do conduct an examination, they have been getting really good at taking that information that they gather through things like electronic blotters—putting that through their analytical systems and using that to identify areas of potential focus. And so the way we used to think about it was, it’s trying to find needles in haystacks and the analytics aren’t necessarily going to find the needles for you, but they're going to tell you that if there are needles they're probably in this part of the haystack.” “I think as an examiner at FINRA, what I really want to know is not particularly what I find on the examination, but when I leave the firm, what are they going to be doing to make sure they have controls over the risks that I’m concerned about.” “You know it’s interesting I’m not sure that Reg BI is changing the landscape in terms of that from the perspective of really understanding the products that you're selling. I think there's always been that expectation, you know whether it was reasonable basis—suitability requirement or the care obligation with respect to Reg BI but the important thing is that firms before they start recommending products that they understand those products. They understand the features and the risks and that the people who are selling them understand them as well.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast! On today’s show, we officially launch the Lessons From the Front Lines series. Much like our regular shows, this series will provide the same excellent content to help you put Compliance In Context™, but will deliver that content in a more narrative form—like a fireside conversation with an industry pro. In this way, the Lessons From the Front Lines series will provide you with practical advice and takeaways that focus on real-life, tough lessons other compliance professionals and regulators have learned on the front lines of our industry.  To help guide us through today's conversation, we welcome in Rob Kaplan and Bruce Karpati. In sharing their experiences as former Co-Chiefs of the Asset Management Unit, Bruce and Rob discuss the role of SEC Enforcement and its impact on the industry.    Topics: What is the role of the Division of Enforcement in the industry, and how does the SEC send a strong message in enforcement cases? Review the concept of “regulation through enforcement” Were there consistent failures or compliance violations in the cases you saw in the Asset Management Unit? Discussion of how negotiations that occur in an enforcement case can result in unintended consequences affecting the industry Analyzing the lines between clearly violative activity and “minor” violations Identifying the top one or two lessons learned from each of these cases and the biggest takeaways for compliance   Quotes: “The good public policy way...is when an enforcement matter comes out and it says you cannot do X, right. You cannot have loans to affiliates that are not properly documented because we don't like that. It's when next time somebody comes to the chief compliance officer and says, hey, we're thinking about making this loan to affiliates that they say you know what “[t]here's this enforcement case that says you can't do that,” or the CEO has been waiting or other compliance professional or the GC has been waiting for a case to come out on point to be able to arm them in discussions with the business side to help set the standards.” “If you’re sitting on the compliance side and you read one of these summaries of these orders and you’re still confused as to what you actually have to do, that’s a real problem.” “That to me is the risk: Is that you don’t take something small seriously. You have disclosures that ignore it, it snowballs, and then you have a pattern and practice as it goes on, that you could have really avoided and you don’t know how to get yourself clean.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast. In today’s special episode, we welcome in SEC Commissioner Hester M. Peirce for an in-depth conversation focusing on the controversial topic of Chief Compliance Officer (CCO) liability.  In addition, we discuss the role of outsourced CCOs, the new Marketing Rule, and broker-dealer custody of digital asset securities and cryptocurrencies. She also spoke about the new presidential administration, which will bring in a new SEC Chair and Head of Enforcement, and whether she anticipates a slowdown in dialogue that’s taken place between the regulators and the industry.    Interview   Discussing the motivation to help move the conversation on CCO liability forward Biggest takeaway from the NSCP CCO Liability survey Concerns over whether personal liability will be imposed in cases of simple negligence Thoughts on outsourced Chief Compliance Officers Discussing the impact of a new Administration, SEC Chair, and Head of Enforcement Thoughts on the new SEC Marketing Rule including key takeaways Review the SEC request allowing limited purpose BDs to custody “digital asset securities” Focus areas for Commissioner Peirce in 2021 Career advice for new compliance professionals   Quotes:  “And I think the compliance people at a firm play a really important role in being a bridge and saying to the operational people at the firm, the people who are providing the advice, or doing the day-to-day interfacing with clients, they need to hear from compliance people about how to do that in a way that's compliant with our many rules. And so it's a partnership of sorts. And if you have a liability regime that doesn't work, then you're going to scare good people away from taking those jobs and the whole thing will bring it down.” “But I think it was interesting to see the percentage of people who were worried about the liability uncertainty question and and so seeing that people are trying to grapple with that it was quite enlightening. I think a couple of other things that really struck me.”  “And so how can we put ourselves in the shoes of the compliance officer and say okay this is someone who was really dealing with quite a few issues and was trying to do a good job on those issues. Something fell through the cracks, obviously. That's a very different situation than you when you have someone who has the title of compliance officer and doesn't do anything in the job. Those are the cases where I think the line is sometimes hard to draw and that's the line I really need help drawing.”   Resources:  Compliance in Context  

Welcome back to the Securities Compliance podcast. In today’s episode, we discuss the recently adopted amendments to the Investment Adviser Marketing Rule and a new statement from the SEC alerting investors to a rising number of investment scams. For our interview segment, we welcome in former NSCP Chair and teleworking compliance expert Craig Watanabe to do a deep dive on how firms can best prepare their compliance programs for the increase in teleworking and the types of supervision, cybersecurity, and data privacy issues that are involved there. Finally, we’ll wrap up today’s show with another installment of the What’s On My Mind series, where we’ll look at the new DOL prohibited transaction exemption for investment advice fiduciaries and the greatest comedy centered around Punxsutawney, Pennsylvania.   Headlines SEC Alerts Investors to Rising Number of Investment Scams SEC Adopts Amendments to Investment Adviser Marketing Rule   Interview Review the trend toward decentralization and the impact of the pandemic Compliance challenges that teleworking introduced Fortress versus endpoint security model and teleworking cybersecurity Other tips and recommendations for teleworking cybersecurity Best practices for handling remote supervision Review of regulatory guidance for remote audits   What’s on My Mind Groundhog Day, déjà vu, and the new DOL Prohibited Transaction Exemption for Investment Advice Fiduciaries   Quotes: “And of course, our industry is no exception. We are seeing strong trends toward decentralization, which were evident as you mentioned, prior to the pandemic, but I think just got a huge kick forward with the pandemic and what I think is interesting is most experts believe that this trend will have a residual impact. In other words, when this pandemic is ultimately over, we probably will not go all the way back to baseline, pre-pandemic levels.” “And so the evolution that we are seeing is, we're seeing cybersecurity evolve from a fortress model to an endpoint security model.”  “...Going over and above and being a great compliance department, I think that was all part and parcel of that idea of being not just a good compliance department, but being a great compliance department.”   Resources:  Compliance in Context

On this episode of the Securities Compliance podcast, we’re going to discuss Stephanie Avakian’s departure from the SEC, updates on the proposed marketing and advertising rules, very interesting investment advisor metrics, and some new changes coming to New York state IAR rules. For the interview portion, I chat with Michelle Canella and Hope Brown. The three of us dive into diversity, equity, and inclusion in the financial services industry and discuss the importance of mentors and sponsors. Listen in for a better understanding about what diversity, equity, and inclusion look like in action in the financial services industry.   Headlines Stephanie Avakian steps down from the SEC’s Division of Enforcement. The SEC punts on discussing the proposed advertising and cash solicitation rules Reviewing the IAA/NRS Evolution Revolution Report. Updates to the New York State’s IAR rules   Interview Defining and distinguishing diversity, equity, and inclusion. Ways to implement these concepts inside your organization. How compliance professionals can take on issues of diversity and inclusion. The importance of mentorship and sponsorship in the workplace. NSCP diversity and inclusion efforts and other 2021 activities   History Has Your Back Mentors create environments of trust and safety, stimulating development both personally and professionally. Elevate yourself and your firm by connecting with others to become a mentor or mentee As a tribute to mentors everywhere, a review of Rudyard Kipling’s poem, If   Quotes:  “Well, first and foremost, I really believe that in order to effectuate change, you should change yourself first.” ““I think that mentors and sponsors are both critical to the success of any professional, and in our particular case, compliance professionals. I think, in particular, for women and for people of color, who typically have fewer interactions with leaders within financial services organizations.”   Resources: Compliance in Context

Welcome back to the Compliance In Context podcast! On today’s show, we’ll discuss Jay Clayton’s departure from the SEC and the first real cases from the SEC Enforcement Division's Exchange-Traded Products Initiative.  For our interview segment, we welcome in former NSCP Chair and industry stalwart Miriam Lefkowitz to do a deep dive on how firms can best prepare for the practical application of Regulation Best Interest into their compliance programs.   Finally, we’ll wrap up today’s show with another installment of the What’s On My Mind series, where our focus today will be on the recent rule proposal for “finders” and how this broker-dealer exemption could be just what we need to help struggling businesses with capital formation.   Topics:  Jay Clayton’s announcement of his departure from the SEC Major settlement related to improper sales of volatility-linked exchange-traded products.   Interview REG BI and Form CRS preparation. Practical application of the rule after a full quarter in place How to avoid trip wires Comparing good vs. bad disclosures Methods for staying current with regulations and the NSCP Reg BI Forum   What’s on My Mind SEC Commissioners Encourage Small Business Advisory Committee to Consider Proposed Registration Exemptions for “Finders.”   Quotes: “I think disclosures around monitoring are challenging because there are responsibilities and duties that flow from whether your broker or whether you're an investment advisor.” “The SEC did discuss...the nature and the scope of the review, they've done to date and true to their word. They're looking for good faith efforts to comply. And for the most part they found it.”   Resources: Compliance in Context

Welcome back to the Compliance In Context Podcast! In this episode, we discuss recent rulemaking from FINRA on remote inspections of broker-dealers and check in with OCIE on a risk alert highlighting deficiencies seen in adviser branch exams.  Our interview segment today features SEC and FINRA enforcement guru Brian Rubin for a deep dive into recent trends from the regulators and what to look out for in the future. Finally, we continue the next installment of the Outtakes series to discuss the proper allocation of business and personal expenses.   Topics:   Headlines FINRA Proposes Rule Change on Remote Inspections OCIE Highlights Supervisory Deficiencies at Adviser Branch Offices   Interview Reviewing recent trends in SEC and FINRA enforcement actions. Forecasting future enforcement action stemming from COVID-19 and Reg BI Discussing recent remarks from SEC Commissioner Peirce on CCO liability Detailing NSCP Currents authorship and related topics Outtakes  The proper allocation of business versus personal expenses and how to avoid violations of federal securities laws   Quotes: “We have heard that with regard to penalties and financial sanctions, we are looking at record numbers.”  “In two, three years, I expect we’ll see enforcement actions related to Reg BI, as well.”  "Ultimately, compliance is here to help elevate the services that our firms provide their respective clients...And so, we want to be able to reward those folks that are part of that process to help elevate those services.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast. In this episode, we cover the controversial issue of Chief Compliance Officer (CCO) liability and address recent remarks and recommendations from SEC’s Commissioner Hester M. Peirce to clarify CCO responsibilities. The interview segment features Rob Kaplan and Bruce Karpati discussing the origin story of SEC’s Asset Management Unit. Finally, we continue the History Has Your Back series by taking deep look into a letter from Julius Caesar to Cicero during the Roman Civil War to shine a light on opportunities for personal and professional growth. Based on listener feedback, regular episodes of The Securities Compliance Podcast will drop every two weeks and may occasionally offer extended interviews with bonus content. In addition, the podcast will expand its offerings to include a master class miniseries for members of the National Society of Compliance Professionals (NSCP), and the future launch of the Lessons From the Frontline series.   Headlines: When the Nail Fails–Remarks before the National Society of Compliance Professionals analyzing CCO liability   Interview: Origin Story: Asset Management Unit’s evolution and impact SEC: Building the expertise in specialized areas, including five experts and fundamental areas of investment management Process initiatives and improvements Seeds of Collaboration: Leverage expertise across different SEC divisions Conflicts of Interest represented the foundation for issues review by the AMU NSCP Private Fund Forum Horizon issues for private funds: supervisory responsibilities and valuation issues   History Has Your Back: Ancient Rome is split between two separate factions In a letter to Cicero, Julius Caesar employs a strategy of mercy and empathy as a sign of true strength. Compliance professionals can show real strength and gain credibility inside their firms through understanding and empathy   Resources: Compliance in Context

Welcome back to the Securities Compliance podcast. On this episode, Today, we cover the SEC's new rule proposal regarding private issuers and raising capital and recent criticism to the amendments for Form 13F .  Later, I speak with Chuck Senatore regarding the importance of FinTech and RegTech in the financial services industry and in your firm’s compliance program.  Chuck is a board member and advisor to an assortment of FinTech, RegTech, and cryptocurrency companies. He currently teaches a course on compliance and regulatory strategy at the University of Chicago, and is the founder of the Boston RegTech Meetup.   At the end of the show, we launch the History Has Your Back series by reviewing the keynote address during the 2016 NSCP National Conference to foreshadow the importance of FinTech/RegTech in the investment management industry.   Thanks for tuning in!   Headlines   SEC Proposes Exemption from Broker-Dealer Registration for Small Finders Amendments to Form 13F reporting requirements.   Interview Machine learning and impact of AI in financial services Harnessing technology for better insight and outcomes of compliance testing Blockchain and its impact on future examinations   History has Your Back  How important is FinTech/RegTech to the regulators? We go back in time to look at the National Society of Compliance Professionals 2016 National Conference keynote address by Marc Wyatt, Acting Director of the OC.   Quotes:  “And to the extent that you can harness the technology to bring greater insight, the more ability you have to kind of avoid the wasted time of running down ratholes to determine whether something is a false positive or not.” “While you don’t necessarily need to be a data scientist, having a working knowledge of this space and how you can best leverage data is really important.”   Resources: Compliance in Context

Welcome back to the second episode of the Securities Compliance Podcast. Today, we cover breaking developments on the whistleblower front and new trends in SEC enforcement. Later, I speak with ERISA expert David Kaleda, principal at Groom Law Group, to discuss the latest developments with the new DOL Fiduciary Rule and its impact on the investment management industry. David brings a wealth of experience on all things ERISA and matters impacting the investment and plan space, and he has previously served on the Department of Labor’s ERISA Advisory Council. At the end of the show, we launch the What’s On My Mind series featuring a nuanced take on a contemporary issue affecting the investment management industry.  In today’s segment, we’re looking at the convoluted and confusing area of ESG disclosures.   Thank you for tuning in. We hope you subscribe and join us next time!    Headlines Updates to whistleblower statutes. SEC enforcement trends   Interview Breakdown the new DOL Fiduciary Rule and related Preamble Review the five-part test How to apply the proposed rule in your compliance program now Impact of the plaintiff’s bar David’s predictions for the future.   What’s On My Mind The convoluted world of ESG disclosures.   Quotes:  “...And in that preamble, the department suggests that it’s going to change its views...on when a person acts as a fiduciary for purposes of investment advice.” “By putting this language in the preamble...theoretically, that should apply right now.” “...It’s always tough to anticipate what the government’s gonna do, but in an election year, it gets that much more challenging.”   Resources: Compliance in Context