In a landscape rife with legal obligations, few financial firms are as heavily regulated as broker-dealers.
From transaction monitoring and conflict management to complex customer protection rules, the resources needed to maintain compliance are significant—but not as high as the costs of being found non-compliant.
In this article, we’ll look at the regulatory landscape for broker-dealers and what firms can do to stay on top.
In April 2019, the Prudential Regulation Authority (PRA) sent a letter to CEOs highlighting its expectations for Boards of PRA regulated firms to understand and manage climate-related risks. The statement expects firms to allocate responsibility and appoint a Senior Management Function ("SMF") responsible for identifying and managing climate-related risks.
Between security, financial, and many other regulations, compliance has become a critical business function for every large organization. Keeping track of the rapidly evolving compliance landscape requires time and resources. And actually becoming and staying compliant? That’s a whole other ball game.
According to Compliance Expert Elin Cherry from Elinphant, “anyone who’s actually worn the hat of the Chief Compliance Officer is very aware of the concerns of CCO liability.” When it comes to regulatory liability, the line takes a stop at the CCO. So it’s critical that the CCO is both proactive and consistent with making senior management aware of what’s going on with Compliance within the organization. According to Cherry, rigorous issue reporting combined with regular meetings sets the tone for how your management hears you and opens the door better conversations.
Conduct risk is a form of business risk that refers to potential misconduct of individuals associated with a firm, including employees, third-party vendors, customers or agents interacting with the firm. Read more on conduct risk, what regulators say about it and how to protect against it.
