What you Need to Know about FINRA’s ACM Rule

The end of the year is coming fast, which means so are many of those annual compliance deadlines you may have pushed off at the beginning of the year.

Exhibit A:  The Annual Compliance Meeting.

The Annual Compliance Meeting provides firms with the perfect opportunity to highlight many of the compliance objectives discussed throughout the year and remind representatives of their ongoing and periodic compliance obligations. It’s a great way for everyone to check in with one another and make sure the priorities of compliance are still shared throughout the organization.

If you’re one of the many firms preparing to launch your compliance meeting in fourth quarter, provided below is a summary of the rule and how to comply.

Background Information

Annual Compliance Meeting – Rule 3110(a)(7) requires that each registered representative participate, at least once each year, in an interview or meeting at which compliance matters relevant to the particular representative are discussed. This requirement gives registered representatives the opportunity to regularly discuss compliance issues and assists the firm in ensuring that representatives remain current on changing compliance requirements or changes in the firm. These meetings can be held with representatives individually or with a group of representatives, and can be held at a central or regional location or at the member’s place of business.

Matters other than compliance may also be discussed at the meeting. The member can designate other persons to conduct the meeting, however, members remain ultimately responsible for fulfilling the obligations under the Rule. Thus, at a minimum, members must review the presentation prepared by a third party to determine that all the necessary topics will be discussed at the meeting.

Different Delivery Methods

With respect to delivery mediums, the meeting can be conducted by video conference, interactive classroom setting, or other electronic means, provided that certain safeguards are in place. Members choosing to conduct compliance conferences other than in person must ensure that the communication forum used allows for interactive communication with the representative. This means, at a minimum, that attendees are able to hear presenters live and, in an interactive environment, ask questions and engage in dialogue with the presenters.

In addition to ensuring an interactive environment for all compliance conferences, members conducting such conferences through electronic means or aids may bear a heightened responsibility associated with such electronic communications. As with all compliance conferences, members must ensure that representatives scheduled to appear at a particular location in fact arrive at and are present for the entire conference.

Steps to Comply with the Rule 

A member’s written supervisory procedures should document the procedures for developing a meeting that discusses relevant compliance matters, determining when a representative must attend and confirming a representative’s attendance at a required compliance meeting. In summary, in order to design a supervisory system that is in compliance with this paragraph of the Rule, a member must:

  • confirm that each registered representative attended a compliance meeting within one year from the last compliance meeting attended;
  • identify those representatives that have not attended a compliance meeting at least once in the last year;
  • determine for each registered representative the types of activities that the representative conducts;
  • develop a meeting, whether held on an individual basis or as a group, that discusses compliance matters relevant to each type of activity conducted by the representative or representatives; and
  • determine what, if any, special safeguards must be in place depending on how the meeting is conducted (e.g., video conferencing or contracting with a third party to conduct the meeting).

For a number of larger firms, offering live Annual Compliance Meetings isn’t always feasible. With busy schedules, increasingly large territories, budget limitations, weather conditions and the expansion of branches throughout the country, presenting a live seminar for an hour or more at every branch or sales conference is borderline impossible. In such cases, it may be extremely beneficial, from a time, efficiency and cost perspective to deliver an Annual Compliance Meeting on-demand.

Working with a Vendor

At Quest CE, all of our Annual Compliance Meetings feature an interactive discussion board, time-stamped attendance tracking, unique login credentials and a digital attestation at the end of every meeting. This functionality ensures that, among other safeguards, each representative is actively engaged and able to ask questions that relate directly to their understanding of course materials.

There are three options to deliver your compliance meeting, which are:

1.) Select an “Off-the-Shelf” Meeting

Our pre-built Annual Compliance Meetings feature three to four individual modules that come pre-built and focus on industry hot-topics. These meetings cover a range of topics, such as FINRA Hot Topics or Senior Suitability, and are immediately ready for use. To review our off-the-shelf annual compliance meetings, click here.

2.) Build Your Own Meeting

Through this choice, firms have the option to mix and match three to four of our individual modules to create a meeting tailored around your company’s corporate/compliance goals. To view our individual Annual Compliance Meeting modules, click here.

3.) Create a Custom Meeting

Quest CE is also able to convert firms’ existing training manuals, PowerPoints, and live presentations into an engaging on-demand meeting to develop a brand new, fully interactive experience, that’s deliverable online. To request a quote for a custom compliance meeting, click here.

Click here for more information on Quest CE’s Annual Compliance Meeting solution. If you have any questions about Quest CE’s ACM solution or would like to demo the service, contact our sales department at 877-593-3366 or e-mail them at sales@questce.com.