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Municipal Advisors Warned About Compliance Obligations
On November 7, 2017 the SEC Office of Compliance Inspections and Examinations (OCIE) issued a risk alert announcing it had conducted 110 exams of municipal advisors. The examinations evaluated compliance with regulatory obligations including registration, statutory fiduciary standard of care, fair dealing, record keeping, and supervision.
The staff observed that municipal advisors were “generally unfamiliar with many of their regulatory obligations.”
What Should My Firm Be Doing?
In the risk alert, the OCIE encouraged municipal advisors to “reflect upon their practices, policies, and procedures…and make necessary improvements.” Municipal advisors should review their compliance program, and specifically:
- Register and pay all registration fees with the SEC or the MSRB before engaging in municipal advisory activities
- Ensure all Forms (MA, MA-I. and MSRB Form A-12) are completed accurately and in their entirety, particularly with respect to compensation agreements and outside business activities
- File Form MA-W and withdraw MSRB Form A-12 when withdrawing from registration
- Maintain copies of written communications sent or received by the firm related to MA Activities, including those sent electronically;
- Make and keep documents material to a recommendation made to a client;
- Prepare and maintain accurate general ledgers and records of cash receipts and disbursements;
- Develop/maintain a system to supervise the MA Activities of employees that was reasonably designed to achieve compliance with all applicable rules, including designation of principal(s) to be responsible for supervisory activities;
- Monitor and maintain accurate records of gifts, travel and entertainment expenses; and
- Develop and maintain WSPs tailored to the firm’s business activities and conflicts, and that are reasonable designed to ensure compliance with applicable rule;
How Oyster Can Help
Oyster understands that every firm is unique. Our experts have years of industry experience, and can quickly assess through thoughtful and skillful questions what areas of your firm need the most attention. Oyster will not only provide you with a written report of problem areas, but will also identify best practices. Should your firm need any improvements, Oyster can help you facilitate those changes through support staffing or by taking on the initiative entirely.
Whether you are looking to change from self-clearing to fully-disclosed (or vice-versa), exploring your clearing options or starting a broker-dealer, Oyster can assist with the assessment, analysis, vendor selection and conversion processes.Download