Let’s start 2013 by focusing on one of your greatest risks: not meeting the compliance standards of the firm or the regulator. It’s a risk that can cost dearly in the form of penalties, reputation and negative media attention, and one you cannot afford to take.
Only through effective supervision can failures to uphold the firm’s and the industry’s practices and standards be detected. But is your firm’s supervision robust enough to catch these instances before it is too late?
What Is At Stake And Why
The obligations of a supervisor, such as a branch manager, are many and can present significant challenges for the firm as well as for the supervisor. Regulators, such as Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Associations (MFDA), design their examination programs to detect failures to adequately supervise. Such failures can lead to enforcement proceedings taken against firms, officers and supervisors.
Statistics published by IIROC for the 2011-2012 period show that there has been a significant increase in the dollar amount of fines assessed and the number of supervisions imposed (40 per cent greater than 2010-2011). Perhaps even more damaging are the negative effects on reputation that come with any notice of proceedings taken by regulators against firms and advisers.
What Our Compliance Service Team Can Offer
An independent examination mandated by the firm/branch will allow a manager to determine whether your supervisory practices and procedures are adequate and proactively identify the elements to improve.
In an examination, we evaluate:
The culture of compliance at the firm/branch, the adequacy of compliance training and the visibility or presence of supervisors
The tools used and the timeliness of supervision and interventions
The effectiveness of supervision procedures and the daily interventions by the supervisor
The documentation practices of the supervisor
The knowledge of complex products such as leveraged exchange traded funds (ETFs) sold at the firm/branch level
The effectiveness of communication between supervisors and advisers
How the supervisor deals with issues that may pose risks to the firm such as withdrawal requests, trading authorizations and regulatory changes (such as the client relationship model which will add new suitability obligations relating to account type and fee structure)
Other practices and procedures on a case-by-case basis
Our examination of your firm’s practices and procedures will yield concrete, useful and objective advice presented in a clear written report. This report will serve as proof of your firm/branch diligence with respect to regulatory requirements and as evidence of a strong compliance culture at your firm. It can be used as a basis on which to motivate and offer training to your personnel.
About Our team
Regular regulatory updates covering the financial services industries: dealers, portfolio managers, anti-money laundering (AML), counter-terrorist financing (CTF), privacy and case law
Review of practices, procedures and documentation of the firm (account opening, policies and procedures manuals, and special purpose documentation)
Assessments/examinations of the effectiveness of practices and procedures at the firm and branch levels, including supervision
Comprehensive assistance in all phases of regulatory or internal investigations or inquiries (strategy, draft correspondence, negotiations)
Analysis, advice and drafting of requests for exemption and other applications to regulatory authorities
Analysis and recommendations regarding new financial product and service offerings and their compliance with legal requirements
Regulatory and legal due diligence of financial products and their promoters and managers (investment funds, principal protected investments, capital pools)
Representation in civil litigation and disciplinary matters before courts, tribunals and other special hearing committees
Securities class actions regarding prospectus and secondary market disclosures
Financial service defence
Registration and continuing obligations of registrants in the financial industry including sales compliance and business conduct (Regulation 31-103)
Compliance regarding the distribution of financial products (prospectus and exempt, Regulation 45-106)
Anti-money laundering and counter-terrorist financing
Freezing of financial assets (Special Economic Measures Regulations)
Training of personnel on regulatory, compliance and business conduct matters as well as with respect to supervision
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