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Business Planning – Company Budgets – the Holidays… Compliance?

A very busy time of year indeed; nevertheless, we need it all and then some. Just as every day is a new day, every year brings new challenges. Most companies close the books and tasks on a calendar year-end basis. If your firm is one of them, it’s time to take stock of the business successes along with those areas in need of improvement.

Planning and budgeting should be in the final phase of revisions from efforts that, in some cases, begin as early as September. The leadership team should know the New Year’s priorities and have cost-accounted for them accordingly. Forecasting is as much an art as science; consider rewarding not just those that meet or exceed their budgeted operating income targets, but those that are able to accurately forecast, as they are the ones on which you can rely on for planning purposes.

Not to be overlooked as part of your planning and budgeting is meeting the regulatory hurdles that seem to grow on an annual basis. Do you do ‘compliance’ on an ad hoc basis? How seriously do you take the repercussions of an SEC or FINRA audit? Do you think that perhaps you’ll just be able to ‘skate by’ another year with no regulators stopping in for a visit? Remember, ‘hope’ is not a strategy.

As a regulated entity these areas that cannot afford to be overlooked:

Compliance at the firm level

  • Operational level;
  • Supervisory level.

All of which have requirements and all of which weigh equally in meeting your compliance needs.

Broker-Dealer, Registered Investment Advisor or hybrid, the regulatory requirements are an absolute. The regulators are unwavering in insisting you live up to the firm’s compliance requirements; ignorance of the rules is not a defense. Firms should absolutely take an inventory of the compliance requirements completed to-date, an inventory of those requirements where the firm is deficient and the resources necessary for meeting the New Year’s needs.

Some of the compliance requirements for broker-dealers include, but are not limited to:

Review and update Written Supervisory Procedures

  • 3012 Test
  • 3130 CEO Cert and Report
  • Independent AML3010 – Supervision
  • Annual Audit by a PCAOB firm

Some of the compliance requirements for registered investment advisor firms include, but are not limited to:

206(4)-7 Test

  • Compliance Report to Management
  • Annual Risk Assessment
  • Review and update Policies and Procedures Manual
  • Annual surprise Audit for firms which have custody

For most firms, a well-structured compliance program is supported by outside resources. This extends the bench of expertise and reduces the costs of operating a compliance department. The principals and consultants at RegMaven are experienced in all aspects of compliance, operations, platform development and business. Contact us today to discuss your business and how we work to either introduce or enhance the compliance aspects of your business. For a consultation please contact us at consultation/

We wish you and your family a Happy Holiday Season.

Best wishes, RegMaven Team

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