NASAA: 2012 Compliance Best Practices For Broker-Dealers

Using results from problems found during a nationwide examinations of broker-dealers conducted by state securities examiners from 24 North American Securities Administrators Association (NASAA) jurisdictions that revealed significant problems, NASAA  has identified what it believes are top compliance violations and made recommendations to solve them.

With the 2012 Coordinated Broker-Dealer Examinations Project, NASAA addresses problem areas while offering 10 recommended best practices that broker-dealers should consider to improve their compliance practices and procedures.

In its  release, NASAA highlights the project’s finding that “the greatest frequency of violations (29 percent) involved books and records, followed by supervision (27 percent), sales practices (24 percent), registration & licensing (14 percent), and operations (6 percent).”  NASAA found the top five types of violations included “failure to follow written supervisory policies and procedures, suitability, correspondence/e-mail, maintenance of customer account information, and internal audits.”

While these findings and recommendations may prove useful, they should come as no surprise to broker-dealers who, in the past few years, have been examined by either FINRA, the SEC or any state for that matter. 


Author: Dexter Johnson

The author is a an attorney who for the past 14 years has concentrated his practice in representing, successfully, investment advisers, broker-dealers, corporations and individuals who are subject to SEC, FINRA, State or other regulations and who may be the subject of regulatory examination, review or investigation. He formerly worked at the SEC. His regulatory and litigation experience has encompassed virtually every type of securities issue in the industry. He has also negotiated favorable outcomes in many of these matters for his clients.