Risk Management

As the COVID-19 situation continues to evolve, market volatility, workplace disruptions and a shuttering of everyday life are becoming increasingly commonplace. While the 2021 LIBOR phase-out may not seem top
Continue Reading All Systems Go? LIBOR Transition Efforts During the COVID-19 Pandemic

On July 22, 2019, the federal bank regulatory agencies and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (collectively, the “Agencies”), issued a Joint Statement on Risk-Focused Bank
Continue Reading Joint Statement Emphasizes Risk-Focused Approach to Examinations of Banks’ BSA/AML Compliance Programs

As robo-advisers continue to grow in popularity with investors, especially millennial investors, at least one regulator is taking a closer look.  On July 14, 2016, Massachusetts Secretary of the Commonwealth
Continue Reading Massachusetts Offers Policy Guidance on Investment Advisers’ Use of Robo-Advisers

FINRA has sent a sweep letter to selected broker dealers in order to learn more about how firms “establish, communicate and implement cultural values,” and whether those values are guiding business conduct.  FINRA conducts sweeps like this periodically in order to gather information that it can then use in focusing its regulatory response to emerging or priority issues, and it specifically identified “firm culture” as an area of emphasis in its 2016 examination priorities letter.  Although the concept of firm culture was left undefined in the exam priorities letter, FINRA noted in the sweep letter that “one definition” of firm culture is “the set of explicit and implicit norms, practices and expected behaviors that influence how employees make and carry out decisions in the course of conducting the firms’ business.”  The sweep letter appears designed to investigate what those norms and practices look like at present in the industry, as the regulator has expressed its desire to “better understand industry practices” and to “determine whether firms are taking reasonable steps to properly establish and implement their own cultural values within the firm.”  The issuance of the sweep letter appears to be FINRA’s first step towards what it described in the exam priorities letter as “formalizing” its assessment of firm culture.

As part of its review, FINRA will meet with executives, compliance and legal personnel and risk management staff at a small number of brokerage firms to discuss cultural values and how those firms communicate and reinforce their values within their organizations.  FINRA is “particularly interested” in how individual firms measure compliance with their own cultural values, what metrics (if any) are used, and how the firms “monitor for implementation and consistent application of those values” throughout the organization.  In advance of those meetings, FINRA has asked the firms selected for the targeted exam to provide it with a significant amount of thought-provoking information, including:
Continue Reading FINRA Seeks Input From Brokerage Firms on ‘Cultural Values’

On Jan. 11, 2016, the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) issued its annual Examinations Priorities for 2016 (Exam Priorities), which
Continue Reading SEC’s Office of Compliance Inspections and Examinations Releases Annual Examination Priorities