Spring Cleaning – Your Master Compliance Checklist

There are so many changes in regulatory guidance at the moment that it feels almost impossible for firms to stay up-to-date and compliant with the latest industry developments. Approaching updates with a “housekeeping” frame of mind, however, can help your organization make the minor adjustments it needs to meet any new requirements. To prune the regulatory thicket, we recommend following these five tips to better organize your compliance program.

Digital is the new filing cabinet

If you plan on purchasing more filing cabinets this year to store all those outside business activity requests or written policies and procedures that are now piled high on your desk, consider using a compliance management system, with access to your information anywhere and anytime. That way, you won’t lose materials or have to bury your head in drawers while searching for information related to past compliance activities.

Put cybersecurity on your to-do list

It is clear that examiners will continue to focus on firms’ efforts to protect their clients from cyberattacks, and in doing so, are likely to question what cybersecurity measures you and your firm have in place to ensure those efforts are successful. If your representatives lack cybersecurity awareness, you may want to invest in training focused on data breaches, phishing tactics and ransomware attacks.

Out with the old, in with the new

Now is the perfect time to make good on those New Year resolutions you made back in January. Perhaps, for example, you pledged to implement new technology that would better assist your compliance department and streamline internal processes. If you haven’t already, start researching products and vendors. Getting the ball rolling is always the hardest part.

Dust off supervisory procedures

Too often, policies and procedures are treated with disdain by management or are even ignored. This is a costly mistake. Rule 206(4)-7 under the Investment Advisers Act requires SEC-registered advisers to review their policies and procedures at least once per year and to make improvements. Similarly, FINRA Rule 3120 obligates broker-dealers to designate and identify one or more principals who will take responsibility for establishing, maintaining, and enforcing supervisory policies and procedures. This “compliance chore” should never be ignored.

Review important forms

Licensing and registration forms can often change from year-to-year, so it’s important to confirm you are still using the most up-to-date versions available. For instance, the SEC recently made revisions to its Form ADV, increasing scrutiny of how firms make their money, use social media and stay compliant with changing regulations and audits. For more information on those changes, click here.

There’s no denying that the regulatory landscape is heating up. Already this year, FINRA has published eight new rule filings, twenty regulatory notices and five requests for comments. When you tally that number alongside what the SEC, DOL and MSRB have been up to, you’ve got quite the lofty list of regulation to keep up with. Take some time this week and “spring clean” some areas of your daily routine that have become a hindrance to the success of your compliance program. In the end, you’ll thank yourself for it!