FINRA Fines/Suspends 15 Reps for OBA and PST Violations
COMPLIANCE DIGEST | NEWSLETTER EXCERPT – According to this month’s FINRA Disciplinary Actions Notice, a total of 15 individuals were fined/suspended for violations related to Outside Business Activities (OBA) and/or Private Securities Transactions (PST). This themed abuse made up 31% of the cases taken against individuals in the September Notice.
While FINRA Rules are fairly explicit in that any registered person must provide written notice to their member firm BEFORE engaging in business outside the firm, a majority of individuals are still getting it wrong. As a firm, the following steps should be taken to better mitigate this risk from occurring.
Train. To better educate your representatives on what qualifies as an OBA or PST, and to reiterate the repercussions of failing to comply with FINRA Rule 3270 and FINRA Rule 3040, it’s important to provide your representatives with OBA/PST training as part of your Firm Element Program.
Track. Implement a comprehensive tracking system to help monitor firm activities, comply with FINRA Books and Records, as well as facilitate open lines of communication between your supervisors and representatives. Using an on-demand platform, representatives can easily login to their accounts to change, add, or update activities, allowing supervisors to then proactively approve, modify or reject requests as needed.
Attest. Have your representative disclose their activities through an online attestation to create a time-stamped audit trail that can easily and quickly be reviewed for accountability. Additionally, once an activity has been approved, it’s important to, at the very least, have your reps recertify their activities on an annual basis.
Monitor. Google Alerts is a free service from Google that allows you to set up a series of search terms or names and receive emailed alerts when Google finds those search terms on the web. Folks and companies of all types can use Google Alerts to monitor press coverage and other internet activity in an individual’s name or a company’s name, for example.
With so many individuals being barred/fined/suspended this past month for OBA/PST violations, it would be wise to set aside some time to review your firm’s current written supervisory procedures, training materials, and activity tracking system.
Click here for more information on Quest CE’s Activity Tracking Solution.
Click here to read the complete September Disciplinary Actions Notice.