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 Eagle Eye has proven to be incredibly effective at reducing risk as it continues to find websites, social media accounts and blog posts on the web that pose compliant risks to a firm, but did you know that it also saves time? Yes, a lot of time. One of our Eagle Eye clients recently reported that they were able to reduce their web supervision time by 80% since switching to Eagle Eye. That’s a huge number. How’s the firm utilizing their newly found time? First, they are expanding their web surveillance program by increasing the depth of Eagle Eye’s search results (at no additional cost by the way). By increasing the depth by 60%, they’ll be able to uncover additional risks while demonstrating to their examiners and regulators that they are meeting their requirements for reasonable supervision outlined in NASD 3010, IM 30103, 3012, FINRA 2210 and FINRA 3270. What else are they doing with their extra time? Well of course they now have time for those extra compliance projects that have been slipping through the cracks over the past few years. With Eagle Eye, not only do you reduce risk and meet your compliance and supervision responsibilities, you save lots and lots of time. Isn’t extra time a wonderful thing? 11/5/2021
MONITORING WEBSITES CAN BE DIFFICULT, TIME CONSUMING, AND SOMETIMES THEY BECOME A BIG HEADACHE Websites are always changing, trending, and updating information about products, company and or your advisors. What happens when these sites aren’t hosted by one of your approved advisor website providers? Those “rogue sites” or “off the range sites” as they are often called, that are created directly by the advisor or by a provider outside of the industry. It then becomes your responsibility to monitor, identify, respond, and document everything that happens with that website as well as archiving it. While there are various solutions out there that help monitor websites for changes, reviewing changes and finding the right kinds of changes have proven to be difficult. With SQWatcher, we took a completely different approach and put added focus on the types of content that comes into the workflow. SQWatcher stands for SiteQuest Watcher and our “Watcher” technology is behind everything that happens in the system. For every client, we create custom “watchers” that identify and isolate the types of changes they would like to review. As the application scans your website(s) throughout the day, it will analyze the changes that are found and determine if a review is required. Additionally, we've learned over the years that advisor websites have many dynamic elements contained within them. These include stock tickers, date widgets, recent post sidebars, calendars, and more, all of which can change on a daily or near daily basis, often generating unwanted reviews. We’ve added a new technology that allows our clients to request “ignores” on these dynamic elements to limit unnecessary reviews. These adjustments allow the sites to be "tuned" over a very short period of time which limits the number and volume of reviews in a big way. Finally, we’ve added powerful bulk review actions that in essence, allows a single review to apply to multiple pages. For example, if the system detected a change to the footer, that would generate hundreds of reviews in other systems, each requiring a separate review. With SQWatcher’s bulk review processes, this sort of change can be reviewed once and then applied across the remaining pages that reflect the same change, streamlining the review process like never before. SiteQuest Compliance is proud of our long-standing tradition of listening to our customers’ needs within their job requirements. Our SQWatcher application was built with these customer requests in mind. We would love to take the time to personally show you how this application will work for your firm. Contact us today for your personalized demo.  In a recent investigation and settlement, the Massachusetts Secretary of the Commonwealth fined a firm for failing to have reasonable policies and procedures in place to detect and monitor a broker-dealer agent’s use of social media accounts. The infamous “Roaring Kitty” investigation found that the firm: “Failed to have reasonable policies and procedures in place to detect and monitor a broker-dealer agent’s use of social media accounts unaffiliated with (the firm) to achieve compliance with the Act of Regulations. Specifically,...policies and procedures were inadequate to detect...social media activities, including over 250 hours, or 10 days’ worth of YouTube videos detailing investment strategies, at least 590 securities-related tweets on Twitter, and a similar volume of posts on other social media platforms all concerning securities-related information.“ Additionally, these findings stated that the firm: “Prohibited its broker-dealer agents from discussing generic securities and company business on social media, including specifically YouTube and Twitter. Despite these prohibitions, (the firm) failed to implement policies and procedures reasonably designed to detect, monitor or prevent its broker-dealer agents from discussing securities-related information or company business…” This settlement resulted in a multimillion-dollar fine, and three years of compliance audits and scrutiny.
Does your firm have reasonable policies and procedures in place when it comes to supervising your agents’ online presence? Are you actively searching and monitoring the internet in compliance with FINRA rules 3110, 3120, 3130, and 3270? Detection is key to a reasonably designed web supervision process. With over 10 years of experience, Eagle Eye has become a trusted partner for firms in establishing policies and procedures, while automating searches and documentation of supervision practices. Eagle Eye provides everything you need including when a result was found, screenshots of the webpage, who reviewed it, comments that were made, and timestamps on every action taken. Address issues prior to regulatory discovery or examination. Contact us today and let us demonstrate how Eagle Eye can support your compliance department while lowering your risk. Source: https://www.sec.state.ma.us/sct/current/sctmassmutual/MMLIS-Consent-Order-E-2021-0004.pdf?utm_source=newsletter&utm_medium=email&utm_campaign=in_case_you_missed_it&utm_term=2021-09-23 9/24/2021
New Secretary of State SearchesEagle Eye, by SiteQuest Compliance, can now search across all 50 states for corporate registrations associated with your advisors. Click to watch and see how.
These Secretary of State reviews are integrated into Eagle Eye’s workflow and can be reviewed with other items of concern such as undisclosed social media accounts, online profiles, websites, event listings, and more. Additionally, corporate registrations can be reviewed in a customized workflow allowing you to view findings across your organization. Eagle Eye automatically documents the whole review process with details on what was reviewed, who reviewed it, comments and actions taken, complete with timestamps, and a screenshot of the business registration listing. Contact us today for your personalized demo to see how Eagle Eye can help you save time and money while lowering your risks associated with Outside Business Activities. 9/20/2021
PART TWO OF NATIONAL PREPAREDNESS MONTH Continually Making Sure Your Monitoring Records and Documentation are in Order
This is not a preparedness matter to take lightly. Just last November FINRA fined a Tier One Company $2.6 million for failures in required electronic records and email retention. Read the full report. The benefits of maintaining accurate, reliable and usable records can help to increase the efficiency and effectiveness of your business. It will ensure your firm is able to access information when required and meet all accountability and compliance requirements. Below are some suggestions that are beneficial in establishing and making sure that an effective record keeping and documentation system is in order when you are monitoring your associates' web presence. Planning. Establish what processes are needed for monitoring records to be effectively maintained and how this will be achieved. Planning a monitoring process will help you maintain a record keeping system that works for your firm and provides clear expectations for supervisors and compliance officers. Consistency. To make it easier for compliance staff members to do their job, have information collected and stored in a consistent way within your firm's network; all staff should follow the same policies and procedures. Communication. Have all your staff made aware of, and ensure they understand, the FINRA general supervision requirements. Verify that all supervisors know and follow the record keeping policies and procedures established by your firm. By communicating expectations clearly, you will benefit from consistent record keeping standards. Modify. Don’t be afraid to modify your record keeping system if you find a more efficient way to achieve results. Regular reviews of your record keeping systems will keep them up-to-date and operating in a way that is beneficial to your firm. Responsibility. Know your responsibilities—what to record, how to maintain records and how long they should be kept. Having accurate and reliable records during an audit will allow you to easily confirm your firm’s compliance. Review. Encourage staff to provide feedback on how the monitoring record keeping system is working and how it could be improved. In doing this, you may gain valuable suggestions that will bring continuous improvement to your administrative records, improving the efficiencies of the practice. Embrace technology. Regularly investing in technology will help improve the efficiency of your general supervision monitoring requirements. Your staff will appreciate any efforts made to improve and automate the task of keeping records, giving them additional job satisfaction. Additionally, removing manual steps not only makes the record keeping process more efficient, it also makes the records uniform and reduces the risk of human error. Our clients have found that Eagle Eye’s automated reporting features saves them valuable time. With just a click, you will have everything you need including when a result was found, who reviewed it, comments that were made and time stamps on every action taken on the account. From a regulatory point of view, with Eagle Eye’s automated screenshots you will have the full story of what content looked like at the time of review, giving you everything you need to respond to a regulator. Supervising the web doesn’t have to be difficult! Let us show you how Eagle Eye is a more effective solution. Contact us today for a demo. Does your web supervision program completely hinge upon disclosure from your advisors, employees, or clients? As the web continues to grow, new technologies create more and more opportunities to advertise, promote, and engage with prospective clients online. These increasing requirements to uncover and supervise a representative’s web presence falls upon compliance and supervision departments. That is where Eagle Eye provides a solution to help formalize your internet supervision program while lowering your risk. Watch and Learn More. Contact us today and let us demonstrate how Eagle Eye can support your compliance department.
9/1/2021
ARE YOU PREPARED FOR AN AUDIT? Did you know that September is National Preparedness Month? Emergencies can happen at anytime and anywhere. Ready Business is a resource that assists businesses in developing a preparedness program by providing tools to create a plan that addresses the impact of various hazards. Preparedness is the key to ensuring that your business will continue after a disaster.
In light of this national observance, our blog is focusing on preparedness and preparing for an audit. We understand that the arrival of FINRA examiners at your firm may cause some concern—especially if it’s your first examination, or if it has been a while since your last audit. How can I help my firm prepare for a FINRA audit? Tell your staff about the audit. This also helps those staff members that FINRA needs to contact, identify and prepare the records and information that they need to have available when the audit begins. Review past audits. If your firm has been audited in the past, it is worth reviewing the last audit report. Often past audits have recommendations for improvements. In conducting routine audits, FINRA’s purpose is to identify opportunities for improvement, which are in the best interests of the firm being audited and their clients. Identify an audit contact person who can act as a liaison person to work directly with the auditor. This staff member should be responsible for ensuring that auditors have access to records and files or any other resources needed to complete the audit. This person acts as the main point of contact as the audit progresses so that FINRA can continue to keep your firm informed of how the work is going. Your firms’ contact person may find it useful to schedule meetings with FINRA periodically throughout the audit process to help monitor how things are progressing. This is a good way to facilitate communication, resolve issues on a timely basis, and correct any misunderstandings. Cooperation is essential to a successful audit. Depending on the type of exception, if your firm can demonstrate swift corrective action, it may not appear in the final Examination Report. Assemble appropriate and current information about your firm that you think might help FINRA in gaining an understanding of your administrative structure, nature of your operations, and knowledge of employee roles and responsibilities. Other information that might be helpful to have on hand could include key procedures or policies, organization charts and financial information such as budgets and sample management reports. Hot Topics. FINRA is really focusing on social media and cyber security preparedness as part of their audits right now. Are you prepared to respond (with proper documentation) to a regulator when they inquire with regards to your supervision preparedness? Are you finding everything that you are required to monitor? Do you know for certain that your employees have properly disclosed all OBAs? Being prepared to address these "hot topics" will help in the event that you are audited. A FINRA audit is an excellent opportunity to take a thorough look at the risks impacting your business and the controls put in place to mitigate those risks. Please note that these are only general steps recommended to prepare for an audit. We recognize that specific steps and information requests that are unique to your firm will be identified and communicated to you as you interact with auditors. Source: FINRA.org 6/28/2021
Communications with the Public FINRA’s 2021 Report on Examination and Risk Monitoring found that with regards to Rule 2210, Communications with the Public, many firms had insufficient policies, supervision, and recordkeeping for their digital communications. FINRA reminded firms that a “digital communication policy must address all permitted and prohibited digital communication channels and features available to your customers and associated persons.” Our new Policies solution will help ensure that your registered advisors are utilizing your firm’s most current and up to date policies and WSPs with regards to Communications with the Public. Advisors can even designate these Rule 2210 specific WSPs as “favorites” for quick and easy reference within the Policies app. FINRA also reminded firms about the need to provide training on relevant FINRA rules and firm policies when it comes to communications with the public. With our Policies app you can send links to your advisors when new policies are published. Each policy will state when it was published and by whom. You can even link within your policies to specific related FINRA regulations and rules. FINRA cited as some of their concerns: “Not maintaining policies and procedures to reasonably identify and respond to red flags—such as customer complaints, representatives’ email, OBA reviews or advertising reviews—that registered representatives used impermissible business-related digital communications methods, including texting, messaging, social media, collaboration apps or “electronic sales seminars...” SiteQuest Compliance has several applications to support compliance personnel in their efforts to supervise “Communication with the Public”. Our Eagle Eye app will assist you in monitoring the internet while discovering any potential undisclosed OBAs, social media accounts, blogs, websites, and more. With built in automated documentation you will have everything you need including when a result was found, who reviewed it, comments that were made, and timestamps on every action taken. From a regulatory point of view, with Eagle Eye you will have the full story of what communication content looked like at the time of review, giving you everything you need to respond to a regulator. Eagle Eye's “Heightened Supervision Mode” empowers you to monitor your advisors at a variety of levels. For those that push the envelope a Heightened Level of Supervision may be required. In any situation, Eagle Eye allows you to customize your approach with built in automation to notify specific individuals up the chain of command. FINRA stressed the importance of notification and monitoring. “Requiring registered representatives to notify compliance of any changes to approved communications, and conducting periodic, at least annual, monitoring and review of previously approved communications for changes and updates.” With our SQWatcher application, firms can monitor communications on websites by actively supervising for unapproved changes and providing historical archives of the sites. SQWatcher can even monitor websites hosted by non-approved website providers.
SiteQuest Compliance supports your firm’s adherence to regulatory requirements 2210 by actively supervising the internet, monitoring and archiving websites, and ensuring that your advisors have access and are utilizing the most current policies and WSPs with regards to Communications with the Public. With our suite of compliance applications SiteQuest Compliance has become a trusted partner for over a decade. Contact us today and see for yourself how our suite of applications will work for you. Source: https://www.finra.org/rules-guidance/guidance/reports/2021-finras-examination-and-risk-monitoring-program/communications-with-public 3/15/2021
Time is Your Most Valuable Asset There’s a reason why most successful people agree that time is their most valuable asset: Once it’s gone, it’s gone forever. Unlike money, you can’t earn more time. Here are five ways how I try to get time back during my workday:
In business in general we waste our time by doing what we have always done, the way we have always done it. Getting bogged down in manual processes that could be streamlined through innovation and technology. Oftentimes for compliance, their responsibilities can become overwhelming, frustrating, and stressful because the workload for supervision is continually multiplying. Today’s regulatory environment is one that supports innovation within the financial industry. Regulators encourage financial organizations to rely on technology to effectively and efficiently execute a compliance program. FINRA’s newly formed Office of Financial Innovation is an example of this. For over a decade SiteQuest Compliance has been the partner of choice when it comes to internet supervision and website monitoring. Our automated applications on average cut our clients work load by 80%. Eliminating time-consuming manual processes, automating notifications and reports, and streamlining workflows. How do you want to get back your time? Contact me today, and I will personally show you how our applications will work for you and your firm. One of our clients stated: "The Eagle Eye application has been a force multiplier in my firm’s supervisory scheme. This simple tool has transformed my internet surveillance sweep process from a time-consuming, multi-day enterprise where I view the same search results over and over to a simple process that can be completed in a couple of hours." 2/26/2021
Compliance with FINRA Rule 2210 The “Communications with the Public” Rule FINRA 2210 states that “an appropriately qualified registered principal of the member must pre-approve each retail communication before the earlier of its use or filing with FINRA's Advertising Regulation Department ("Department").”
“Retail Communications” include all electronic formats as well. In addition to supervision approval: “Each member shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by an appropriately qualified registered principal of institutional communications used by the member and its associated persons. Such procedures must be reasonably designed to ensure that institutional communications comply with applicable standards.” Our Eagle Eye and SQWatcher applications support your compliance program when it comes to complying with this rule. Our innovative Eagle Eye application will search the internet and allow supervisors to identify and discover your registered advisors’ online presence. Our multi-query processes and dynamically designed algorithms provide more accurate search results for supervisors to quickly review. With our automated documentation and reporting features, you will have everything you need including when a result was found, who reviewed it, comments that were made and timestamps on every action taken during the online supervision of your registered advisors. SQWatcher will supervise and archive all websites, even those not hosted with your approved providers. It will organize web-page changes into a manageable, easy to use workflow. Automatic triggers based upon your requirements will notify you of pending reviews. These products were developed for the compliance supervisors who are looking for automated solutions to replace manual processes that prove to be ineffective and tedious. Note: NASD Rule 2210 has been superseded by FINRA Rule 2210. Source: https://www.finra.org/rules-guidance/rulebooks/finra-rules/2210 |
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