This spring FINRA announced the formation of the Office of Financial Innovation that will serve as a central point of coordination for issues related to financial innovations by FINRA member firms, particularly new uses of financial technology.

The goal in mind to further enhance FINRA’s ability to identify, understand and foster financial innovation in a manner that strengthens investor protection and market integrity.

With 10 years of experience supporting our partners in their supervision and compliance with FINRA, SiteQuest Compliance is pleased about the dedication to financial innovation.

SiteQuest Compliance has a long standing tradition of being a thought-leader. Working side-by-side with customers as we develop and improve our supervision applications to meet their needs. As more and more regulation burden is being put upon financial firms, SiteQuest Compliance is stepping up and serving as a trusted partner. Learn more about our applications.

Eagle Eye is the first of its kind application that uncovers and supervises your advisors’ online footprint. It discovers social media accounts, websites, blogs, OBAs, DBAs, online profiles, and events that belong to or are about your advisors, allowing you to address issues prior to regulatory discovery or examination.

SQWatcher stands for our SiteQuest "Watcher". Our ​SQWatcher application monitors and archives advisor websites that may be hosted by non-approved website providers. It creates historical records of these sites, creates workflow events of specific types of changes like new pages, changes to readable text, images, and more with customizable rules to meet your needs.

Policies organizes, manages and delivers your firms policies and WSPs. Our Policies application provides a clean, easy-to-use, easy-to-search and up-to-date experience for your advisors. Policies brings all of your procedures, policies, WSPs and other documentation into one place that can be accessed on both a desktop and mobile devices. 

Our customers have referred to our applications as “force multipliers” that exponentially expand their search and supervision capabilities. Firms are able to identify and address issues before they are brought to their attention by a regulator.

“Innovation continues to pose new opportunities and challenges for our member firms and the broader financial services industry, and it is essential that we as regulators keep pace,” said FINRA President and CEO Robert W. Cook.

With the even increasing trend for registered advisors to utilize technology to grow their online presence with updated profiles while sharing fresh and timely content. It is paramount that supervisors have support and a partner to help them with their ever increasing responsibilities.

Let us show you how we can help. Contact us today to discuss your supervision challenges. Together we can lay out a plan to keep pace with technology innovations.
 
Source: https://www.finra.org/media-center/news-releases/2019/finra-forms-office-financial-innovation-announces-haimera-workie-head

2020 is a big year for us as we are celebrating 10 years of compliance partnerships. There have been many significant changes in supervision over the past 10 years, especially with an increase in workload and scope for online supervision. Trying to stay compliant with the FINRA 3110 Supervision rule can become a daunting task as the web offers an easy to use and often free resources for advisors to get their name and practice out in the public eye.

As YOUR compliance partner, we’ve observed several interesting trends that we expect to see increase during 2020.

With the increase in online articles being published on blogs, websites, and social media sites like Linkedin, many advisors are writing, being mentioned, and even cited in third party articles. We continue to see these occurrences with very little if any disclosure information and perhaps is not considered pre-approved content.

Have you heard of Quora? Quora is an online question and answer platform. 775,000 people use Quora monthly to ask questions. This is a large audience that advisors have the ability to connect with. They can publish content, answer people’s questions, and search for specific topics that relate to your industry. BUT how do you know if your registered advisors are using Quora?

Yelp is another online platform that is continually growing in popularity. The Securities and Exchange Commission recently charged three advisers and a marketing firm for violating the testimonial rule by promoting their business on Yelp. Over 4.6 million businesses are using Yelp. With 163 million Yelp reviews, how are you to know if your advisors are actively soliciting testimonials from their clients?

Adding to your monitoring struggle is YouTube. It is estimated that over 300 hours of video are uploaded to YouTube every minute! There is an increasing trend in people publishing personal video and vlogs related to their business. With over 1 billion daily users how are you to find videos uploaded to YouTube by your registered advisors if they don’t send you the direct links?

Advisors can create non-monitored social media accounts. How do you know if your advisors even have a social media account if they don’t tell you about it? How do you find these social media accounts?

One of the biggest trends that we see continuing into 2020 are the use of DBAs. FINRA observed that “certain firms were not maintaining sufficient WSPs and controls, or providing adequate disclosures regarding the use of DBA names.” ​​Outside business activities and unauthorized content from your registered advisors are a growing concern that will always be present. What controls does your firm have in place to aid you in discovering these DBAs if your advisors are not disclosing them? How do you know what your advisors are putting online using their “DBA” name?

Your time is valuable. Any search engine can produce an endless amount of meaningless results that need to be reviewed. Our Eagle Eye application is designed with built-in intelligence that sifts through the web’s clutter and brings the most relevant results to your attention. Our multi-query processes and dynamically designed algorithms provide more accurate results for a quick review process. In addition to our search results our automated screenshots feature helps you document, report and escalate any issue that is brought to your attention.

One of our clients said :

You can minimize your risk and address these growing trends by utilizing our Eagle Eye application.

Contact us today for your personalized demo of how our application with work for YOUR firm.

Sources: https://www.sec.gov/enforce/3-18586-90-s
https://www.finra.org/sites/default/files/2018_exam_findings.pdf

A securities firm and its chief compliance officer were fined $225,000 by FINRA and required to retain an expert to evaluate and approve its written supervisory procedures (WSPs).

** We would like to note that the actions of this CCO are not the norm. This person committed many willful violations which led to this fine. But, many of the violations were in direct relation to supervision. SiteQuest Compliance provides solutions to CCO in regards to internet and website supervision. That is the primary focus of our article review.

NASD Rule 3010 required that FINRA member firms have reasonable supervisory procedures. The CCO in this case was responsible for reviewing and drafting the firm’s WSPs, and the WSPs provided that all advertising would be reviewed for misleading or inaccurate statements and that the firm’s president, would do so. The firm’s WSPs also specified that “all business messages on the internet shall be considered advertising.” And NASD Rule 2210 defined “advertisements” to include “any material . . . that is published, or used in any electronic . . . public media, including any website.” The NAC faulted the CCO for not “identifying” in the WSPs that “websites are advertising to be reviewed”; its rationale for holding the CCO liable when “the firm’s procedures did not specifically state that websites were advertising.” One registered advisor for this securities firm created two non-password-protected, publicly available websites. This firm and the CCO didn’t ensure appropriate review and supervision of these websites as advertising.

In the end, the NEC found that the firm’s failure to supervise the websites violated NASD Rules 3010 and 2110 and FINRA Rule 2010.
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Our SQWatcher application would have been a great resource and support for this securities firm. SQWatcher is a web-based solution that TRACKS, MONITORS, and DOCUMENTS your websites assisting with your compliance. With SQWatcher, you have a partner that is built to support your firm, knowing that your required websites are being monitored and archived with tools that will alert you if there is a problem. With an easy to use interface, we will personally support you through the implementation and learning process, continually ongoing to ensure that you and your firm are getting the most out of this industry-leading application.

SiteQuest Compliance has over 15 years of industry experience supporting CCOs with their ever changing and increasingly complex job requirements.

Every day, thousands of advisors and advisor websites are being monitored and documented with the aid of our industry-leading compliance and supervision applications. We are proud to be a partner in compliance. We would love to discuss your compliance concerns. Contact us today!

Source: (FINRA Case #2011027666902)

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