Financial Compliance

11


Be Proactive

Financial compliance for broker-dealer firms is as crucial as the trades themselves. Firms must take precautions and establish effective methods to stay compliant with the latest regulations since a bad audit or fine can not only blemish a reputation, but also cost a firm millions of dollars. Having an active communication monitoring and archiving solution plays a major role in meeting—and exceeding—the basic compliance requirements established by FINRA and the SEC.

Our FinTech products specialize in financial industry compliance, with particular expertise in FINRA and SEC regulations. Our goal is to help compliance officers do their jobs more efficiently.


Two Roads Software Provides:

  •     Communication Supervision
  •     Archiving
  •     Shareholder Protection

  • Monitor email and social media such as LinkedIn, Facebook, and Twitter
  • Supervise messages in real time
  • Messages classified automatically
  • Classification methods adapt specifically to your firm
  • Create detailed reports and audit trails that demonstrate proof of supervisory and policy enforcement

  • Email, social media, and instant messages are stored in a WORM-compliant repository by our archiving partner.
  • Our partner archives content contextually by organizing it into logical conversation threads
  • Benefit from our partner’s industry-leading technology such as advanced pattern matching and tamperproof archiving

  • Protect the CEO. Your CEO is responsible for any compliance issues that could occur within their tenure. Both company and leader reputations are at stake in the event of a public case.
  • Protect the compliance officer. Your compliance officer is first in line when it comes to compliance. Failure to detect misconduct could lead to consequences for all shareholders.
  • Protect your investors. They are the main drivers behind your company and their trust deserves as much attention as their assets.
  • Protect the financial industry. The entire industry suffered following the 2008 financial crisis. Since then, regulators have implemented more regulations and controls in order to rebuild the reputation of the financial industry. We help cultivate a financial industry that is more controlled, fair, and profitable.


Financial Regulations We Cover:

Outlines requirements for data retention, indexing, and accessibility for the financial organization  who deal with brokering or trading.

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Implements requirements and restrictions on financial institutions ability to disclose nonpublic personal information about consumers.

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Each member is required to establish and maintain a system to supervise activities of registered representatives to achieve compliance with securities laws and regulations.

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A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.

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No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance.

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A member or associated person must have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer given their unique financial situation, financial goals, and risk appetite.

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All communications with the public must be fair and balanced, and cannot include any false, exaggerated, unwarranted, promissory, or misleading statement or claim. Any communication sent to 25 or more people is considered advertising and must be pre-approved by a qualified supervisor.

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If a member buys or sells from his own account to a customer, he must buy or sell at a fair price given current market conditions.

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Each member shall designate and specifically identify to FINRA one or more principals to serve as a chief compliance officer.

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Any member or person associated with a member shall not give or be given anything of value in excess of $100 per person per year. A gift of any kind is considered a gratuity.

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No person associated with a member in any registered capacity may borrow money from or lend money to any customer of such person. There are several exceptions.

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No registered person may engage in outside business activity beyond the scope of a member firm unless given prior written notice to the member firm.

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Each member firm must develop and implement an anti-money laundering program complete with internal controls.

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Outlines the books and records requirements for financial firms.

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A member must report within 30 days any written customer complaint involving allegations of theft or misappropriation of funds or securities or of forgery.

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No member or associated member shall execute an order to buy or sell a security or other financial instrument when the member has information concerning an imminent block transaction of that security that is not yet publicly available.

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Hosting Certifications:

  • HIPAA via HITRUST
  • Our hosting partner has been certified against the Common Security Framework (CSF) from the Health Information Trust Alliance (HITRUST) to address HIPAA compliance requirements.

  • PCI DSS Level 1
  • Our hosting partner’s secure cloud has been validated compliant as a Level 1 Service Provider (highest level) by the Payment Card Industry Security Standards Council (PCI SSC).

  • SSAE 16
  • Our hosting partner has received SOC 1 Type 2, SOC 2 Type 2, SOC 3 and ISAE 3402 reports. These reports demonstrate the viability of FireHost’s control program over time.

  • ISO 27001
  • Our hosting partner has received a certificate of approval for our control program against the ISO/IEC 27001:2005 standard for Information Security Management Systems.