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Managing Your Annual Compliance Checklist

Wednesday, November 3, 2021

2020 was a year unlike any other, as we worked through the impact of the COVID pandemic, shutdowns, and sheltering in place.  

With everyone trying to resume life as normal while still facing the challenges of remote work and staffing concerns, 2021 has been a blur. And now, it’s already time to start thinking of and planning for 2022.  

In preparation for the new year, it is time for everyone to review operations to see what, if any, changes will take place going forward into the next year. Which items should be on your list as you move into a new year, so you can remain compliant and manage your efforts?  

  1. FINRA Annual Renewal Statement 

One important item on the list should be monitoring the email inbox for FINRA’s annual renewal statement so renewal fees can be paid and registrations renewed. Firms can begin completing their required forms beginning November 8.  

Many firms choose to log in to their online accounts to complete their forms and make their payments. As a reminder, the CRD/IARD system does shut down for the year on Dec. 26, so save yourself some stress and don’t wait until the last minute to complete the process.  

2. Registrations in New States  

The end of the year is also a good time to review your client lists and determine whether there are any new states in which you need to register or notice file 

You want to ensure you are registered anywhere your clients reside, as well as anywhere where you may want to advertise or promote your services in the future. It can be frustrating to prepare a marketing campaign to attract clients in a new area, then to have to put it on hold because your advisers aren’t registered to conduct business or to advertise in that area.  

Additionally, for state-registered advisers, it is important to keep an eye on the regulatory assets under management to ensure the transition from state to SEC is handled in a timely manner when required. 

3. Registration and Licensing Renewals 

Speaking of registrations, the end of the year is an excellent time to ensure all your advisers are up to date on their licensing and registration requirements. If you make individual requests and track all their data in a spreadsheet, you run the risk of falling prey to someone’s busy schedule or faulty memory and allowing a deadline to slip past you.  

Use a registration management tool to ensure you’re able to keep track of the myriad requirements for your advisors to continue managing their client relationships and attracting new business efficiently. Using a system can make your filings easier and more automated at the same time that it makes tracking more streamlined and convenient.  

4. Annual Rules and Regulations Reviews  

For those registered with the SEC and FINRA member firms, if not already completed, it’s time to complete the annual reviews required by the Rule and Regulations under which you operate. Although the regulators may not be out knocking on doors, they are still conducting audits electronically. With that said, they expect all to be compliant and in good order. 

5. Written Compliance Policy Updates  

At least annually, and more often if possible, take time to review and update your written compliance policy 

Many firms buy an initial template from a vendor and have good intentions to update it. However, when work becomes a blur as it has the past two years, it can be easy to put written policy updates on the back burner.  

Finish up the year with a thorough review of your policies and ensure that you document the review so examiners can quickly and easily see you’ve been striving for compliance.  

6. Technology Review  

Regulators have indicated that technology is no longer just a nice-to-have. For investment firms and broker-dealers, technology is a requirement to juggle the many demands placed upon your compliance teams.  

Does your staff have the technology resources in place to support their compliance efforts? Ensure the tools you currently have are working for your firm and making your processes more efficient, rather than creating additional hoops for your team to jump through. Your compliance technology should:  

    • Be 100% books and records compliant 
    • Move information quickly through the approval process while also mitigating risk 
    • Enable easy-to-follow processes that work for your team and that keeps everyone using the tool properly  

The past couple of years have been stressful as we’ve adjusted to new ways of working and continually shifting expectations.  

Although it may have been difficult to conduct business as normal, the past two years will not be an acceptable excuse for compliance responsibilities to go by the wayside. The SEC, state regulators, and FINRA may still not conduct onsite audits in 2022, but they are still regulating, conducting audits remotely, and are insisting on an ongoing commitment to high compliance standards.  

Need support to ensure your compliance efforts are organized? Our compliance consultants and technology can provide additional support for your firm as you ensure you’re ready for a successful and compliant 2022.  

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is a leading provider of intelligent compliance software, offering a range of AI-powered solutions designed to help firms of all sizes successfully navigate the increasingly complex regulatory landscape. Our suite of 17(a)-4/WORM compliant features offer risk minimization, cost reduction, and process optimization capabilities with features that are designed to evolve with our client’s needs. Our flagship advertising review software enables firms to deliver compliant content to the market with confidence, faster. Our Disclosure Management and Intelligence solution simplifies the management of disclosures, while our Registration Management solution automates and streamlines the licensing and registration process, further enhancing your internal processes. 

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