Line of Defense Model: Impact on Compliance Programs

A thoughtful approach to risk management has been the expectation of financial services industry regulators, including the SEC, for quite some time. In 2014, the Office of the Comptroller of the Currency (“OCC”) adopted guidelines applicable to certain banks which established standards for a risk governance framework commonly referred to as the “lines of defense” model. The line of defense risk management model has been implemented by those banks and bank affiliates to which the OCC guidelines apply.

Special Monthly Report Requirement for Broker-Dealers Doing Business in Puerto Rico and Having a Physical Office

On June 21, 2017, the Government of Puerto Rico Office of the Commissioner of Financial Institutions (“OCFI”) issued Circular Letter Number CIF-CC-17-1 In accordance with the Office of the Commissioner of Financial Institutions Act and the Uniform Securities Act, the OCFI requires every broker-dealer that conducts business in Puerto Rico and maintains a physical branch office location in the State, to file a monthly report disclosing the aggregate sum of

Summary of FINRA Regulatory Actions January - March 2017


In the first quarter of 2017, FINRA took approximately 100 disciplinary actions against registered broker-dealers and levied more than $24 million in fines for violations of securities laws. The total dollar amount in fines increased as the total number of fines decreased since the same period last year. FINRA expelled five members during the first quarter, which marks the highest number of expulsions in any first quarter since 2014.

FINRA Provides Reminders Concerning the Use of Social Networking Websites and Business Communications

On April 25, 2017, the Financial Industry Regulatory Authority (“FINRA”) issued Regulatory Notice 17-18. The Regulatory Notice reminds broker-dealers of their recordkeeping obligations pertaining to business communications made through social media. Any business communications sent or received via social media must adhere to the same recordkeeping requirements as all other communications with the public.

ACA Compliance Group and K&L Gates Mutual Fund Distributor Roundtable

Join ACA Compliance Group and K&L Gates in Boston for a seminar designed to assist mutual fund distributor broker-dealer CCOs in dealing with today’s tough challenges. Our industry-knowledgeable broker-dealer panelists from K&L Gates, ACA and the industry will discuss topics relevant to regulatory requirements unique to distributors. This event will be held live in Boston and webcast to attendees in other locations at the same time.