WHAT IS SQWATCHER?
 
SQWatcher 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.
 
WHY DO YOU NEED IT?
 
SQWatcher supports your firm’s adherence to regulatory requirements like FINRA Rules 2210, 3110, 3120, 4511 and 4550 by actively supervising these websites for unapproved changes and providing historical archives of the site.
 
YOUR RETURN ON INVESTMENT
 
SQWatcher’s powerful workflow review processes along with dynamic crawler technology allows your firm to monitor and document dozens to hundreds of websites with relatively few employee hours involved. It reduces compliance and “failure to supervise” risks while demonstrating to regulators, your firm is actively supervising these unique websites in compliance with FINRA and SEC rules.

Schedule your personalized demo today!

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.
​
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)

​

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

What controls does your firm have in place to aid you in discovering DBAs if your advisors are not disclosing them?
​
In December 2018, FINRA released their annual “Report on Examination Findings”. This report serves as a resource for firms to strengthen their compliance programs and supervisory controls. This report focuses on selected observations from recent examinations that FINRA considers worth highlighting because of their potential significance, frequency, and impact on investors and the markets. ​

“DBAs and Communications With the Public” were one of the findings highlighted in this report. FINRA continues to find that many registered representatives are not compliant with FINRA Rule 3270 in trying to conceal their outside business activities. ​

I’M SURE I HAVE SOME COMPLIANCE GAPS, BUT DON’T KNOW WHERE TO START...

​It can be very challenging for financial firms to search, monitor, and document​ ​their ​advisor's web presence and registered websites without interrupting day-to-day business demands and operations. Yet failure to do so can leave ​exposed compliance gaps unaddressed and open your firm up to fines and disciplinary actions from regulatory agencies. Common compliance gaps often include improperly documented or improperly enforced policies and procedures, insufficient evidence of a WSP, undisclosed OBAs and social media accounts, as well as rogue advisor websites. Many firms know that they have gaps, but they don’t know where to start.

FINRA publishes a monthly disciplinary report with actions and fines against firms and individuals. One of the most common fines involves undisclosed OBAs. Currently, many firms work on the “honor system” with hopes that their employees with be completely honest and disclose everything required. Unfortunately, this honor system doesn’t always work. How are you to find out if your advisors have an undisclosed OBA? That is where Eagle Eye can help you close this gap with our deep web searching technology that quickly cut through the clutter of the web and bring to your attention relevant results when monitoring your registered reps.

Do you know if your advisors have disclosed all of their social media accounts? In a recent random sampling of 10 employees from a prospective client, our Eagle Eye solution found serious violations with three of the advisors including several OBAs and social media accounts that were never disclosed. This is a typical compliance gap for many firms. Is this one your firm is facing as well?

Are you sure that your firm is monitoring all of your advisors online advertising? Do you have a process in place that is easy to demonstrate to a regulator? Do you even know if they are producing advertising that you are unaware of? This could be another compliance gap your firm is facing.

In addition to all of the supervision regulations, you need to prove that your firm has WSPs in place to help document all of the actions your firm is taking to monitor web presence. For many firms, this turns into another compliance gap they need to address.

You have a broker-dealer responsibility to monitor every website that your advisors' utilize for business purposes. Many times, advisors want to have their own website to help them stand out among the thousands of other financial advisor websites out there. How are you monitoring these websites? Are you notified of every change automatically so that it can be approved? If not, here is another compliance gap you might be facing. Recently there has been an increase in fines imposed by FINRA regarding website monitoring. Just like this fine imposed just a few months ago. SiteQuest Compliance's SQWatcher program is an easy to use solution that will quickly help you fill this gap at a fraction of the cost of a fine.

Then to complete all of this monitoring you need to document all of your findings in an organized manner. Many times this is the last step in the compliance process and yet it can become one of the largest compliance gaps for a firm. Our automated documentation features found as part of our programs are detailed and searchable. We provide you with all of the information you need to respond to a regulator.

SiteQuest Compliance offers programs, support, and experience to help you bridge these gaps and respond to a regulator. A firm that is able to demonstrate compliance with tangible evidence will mitigate risks, such as costly regulatory fines, and be better prepared for unannounced visits from regulatory agencies.

Contact us today and talk to us about any gaps you need help addressing.

In September 2017, a West Coast financial firm was fined $35,000 by FINRA. It was found that the firm failed to maintain documentation or review the websites maintained by the firm’s registered representatives. (read full report) Are you responsible for monitoring your registered representatives’ websites and online presence? It can become a daunting and time-consuming task. SiteQuest Technologies brings you years of experience when it comes to web monitoring, archiving, and website analysis.
 
SQWatcher is our second product in this category and we have added cutting-edge technology that makes it even easier for you to keep track of what’s going on with your website(s). SQWatcher is configured with specialized “watchers” that look for the types of website changes you want to review. This technology offers a lot of flexibility allowing SQWatcher to adapt to your needs. Our archiving feature backs-up your website(s) daily so that you have a running history to help you quickly and easily respond to a regulator when audited.
 
In addition, this West Coast firm was also fined for “failure to establish a policy or system for approval, for their registered representatives’ business social media accounts, and did not review, approve, supervise, or retain any of the social media accounts maintained by registered representatives for securities-related business purposes.” 

“failure to establish a policy or system for approval, for their registered representatives’ business social media accounts, and did not review, approve, supervise, or retain any of the social media accounts maintained by registered representatives for securities-related business purposes.” ​
Our Eagle Eye program will help you quickly identify any social media accounts that your registered representatives own. Allowing your firm to take action and comply with FINRA requirements. The system's automated documentation and screenshots of your findings will help you respond to a regulator.
 
Don’t let the time constraints of monitoring and documenting your advisor sites and web presence open you up to fines and the associated internal and external costs of a FINRA investigation like the one received by this firm. The cost of our Eagle Eye and SQWatcher programs are significantly smaller. Save time and money while protecting your firm from preventable fines. Our Eagle Eye and SQWatcher programs have two separate purposes, but working together they become a force multiplier in aiding our clients with their responsibilities.
 
Contact us today for your personalized demo. We will help match our programs to your needs.
 
Source: FINRA Case #2013034981501