The new disclosure rules released by the SEC in June create additional requirements for broker dealers and investment advisers to record and retain trading related communications with clients. Financial services firms must be able to easily demonstrate to the US Regulator that they made the proper disclosures to customers regarding advice on trading strategies and recommendations.
To quote the SEC Chairman Jay Clayton, he stated his intention is that "regardless of whether the retail customer chooses a broker-dealer or an investment adviser, the retail customer will receive recommendations (from a broker-dealer) or advice (from an investment adviser) that are in the best interest of the retail customer, and that do not place the financial professional's interests ahead of the interests of the retail customer."
There’s a need to protect firms from the reputational risk this may cause and the regulatory sanction by alerting when best practice isn’t being observed.
Fonetic was at the American Banker’s RegTech event in New York recently where we had the pleasure to listen to regulation and compliance practitioners talking about their experiences streamlining and automating compliance chores and turning that investment into a competitive advantage in the process.
One of the main preoccupations for banks and financial institutions in 2018 is getting regulation ready. With so many different regulatory protocols to comply with, and tight deadlines within which to prepare, it is a considerable challenge for organisations of all sizes and resources.
With numerous regulations to manage, notably Markets in Financial Instruments Directive II (MiFiD II), Market Abuse Regulation, and others such as the Dodd-Frank Act, financial institutions have had to devote huge amounts of resources to meet these obligations.
Considering this investment as well as the intricate, lengthy work processes involved, it is only natural to simply want to reach a stage where your organisation is regulation ready.
In this brief article, we look at how proactive trade reconstruction not only helps your organisation to be regulation ready, but also the numerous value-added benefits that go much further than mere compliance.