Manage and track multiple compliance, risk, and governance operations
Gain control and efficiency with our comprehensive dashboard
Effortlessly centralize document and file management securely
Organize and streamline activities with automated scheduling calendar
Empower compliance with timely notifications, alerts, & deadline tracking
Ensure timely response, accountability, and risk mitigation through escalations
Gain compliance control, mitigate risks, & save time with framework library
Streamline assessments. enhance collaboration, ensure compliance.
Strengthen accountability, compliance, and transparency with audit logs
See our platform in action for free. No credit card required!
Integrate VComply with your everyday tools, and manage compliance and risk better
Manage multiple frameworks, implement controls, and protect your brand
Goin 360-degree visibility with intuitive compliance dashboard
Stay informed and proactive w ith notifications & alerts
Simplify file and document management with ease
Automate compliance workflows for seamless efficiency
Streamline compliance with customizable framework library
Enable collaboration across locations, departments, and teams
Centralize compliance work for streamlined efficiency
Goin actionable insights with robust reporting feature
Automate risk processes, assess risks, align risk and compliance
Identify and track risks using the centralized risk register
Enable collaboration across stakeholders for better resolution
Streamline risk assessment with process automation
Enhance risk visibility with intuitive and centralized dashboard
Establish connection across teams, departments, and locations
Elevate risk awareness through proactive notifications
Manage files & evidence centrally for efficient control
Enhance decision-making with actionable risk insights
Develop, review, approve, distribute, and track every policy with confidence
Efficient policy distribution through central repository
Streamline policy drafting and lifecycle management for simplicity
Simplify compliance with comprehensive policy templates
Simplify policy management with efficient version control
Accelerate policy approvals with automated processes
Collaborate seamlessly with cross-functional teams
Effortlessly measure policy training effectiveness with assessments
Manage policy life cycle with automated reminders and notifications
Streamline audit planning, fieldwork, and reporting using a unified platform
Maintain transparency and accountability with audit trails
Organize and streamline audit with automated scheduling and calendar
Centralize audit files for streamlined evidence collection and management
Stay informed with proactive audit activity notifications & alerts
Streamline audit assessments for comprehensive compliance
Bring audit plans, activities into the single space for complete control
Simplify audits with automated workflow efficiency
Gain 360-degree visibility with intuitive Audit dashboards
Empowering success through streamlined compliance, risk, and governance solutions
Empower your business with simplified regulatory compliance solutions
Empower your enterprise by elevating risk management practices
Transform GRC operations for optimized efficiency and effectiveness
Mitigate risks with seamless third-party risk management
Check out how VComply helps utilities comply with NERC’s reliability standards.
Empower your business with pre-built customizable regulatory and control frameworks
Achieve quality success through ISO 9001 Framework
Deliver compliance excellence with the power of SOX framework
Simplify your security approach with ISO 27001 framework
Navigate cybersecurity excellence with NIST framework compliance
Promote data security through compliance with PCI DSS framework
Unlock trust and security with SOC 2 framework for compliance
See the extensive compliance framework library of over 20+ supported framework
Achieve compliance for your electric utilities with these NERC-approved reliability standards
Empower your industry with unmatched effectiveness and efficiency
Help Financial Services power GRC processes
A smart GRC software that upgrades manufacturing compliance
Modernize banking compliance with VComply
Remove compliance risk from your non-profits
Effectively manage your higher education compliance and risk
Redefine healthcare compliance and risk with VComply
Build, boost your compliance in construction
Strengthen resilience for energy and utility companies
Turn risk into opportunities with F&B compliance software
Stay connected and grow alongside VComply
Stay informed on compliance, risk, audit, and policy management trends
Streamline work with comprehensive guides for seamless management
Navigate complex GRC challenges with valuable e-books
Discover user stories for valuable insights into user-experiences
Access comprehensive definitions and explanations for essential GRC terms
Gain a comprehensive understanding of the features, benefits, and capabilities
Discover insights from experts on the latest happenings in GRC
Learn tips, tricks, and insights to make compliance work for your organization through our expert webinars!
Utilize our go-to templates and checklists to help you stay compliant
Keep in sync with the latest changes by updated framework templates
Get compliance assistance through VComply compliance checklists
Download policy templates that you use to create guidelines and processes.
Discover the power of VComply through our detailed use case guides
Get to know what make VComply the best GRC platform on the market
Discover VComply's value, mission, and vision for better GRC future
Stay informed about VComply and GRC industrylatest updates
Join VComply, redefine compliance, unleash potential
Know about our partnership program
Get to know our board of advisors
Stay up to date on the latest VComply news
VComply offers unparalleled Sales and Customer Support
Send us your sales queries and let us know your needs
Get 24/7 quick and dedicated support anytime
Lets get social
Follow us on LinkedIn for company updates
Join VComply on Twitter for live updates
Broker-dealers are financial intermediaries, both individuals and firms, that facilitate the buying and selling of securities in financial markets. They act as intermediaries between buyers and sellers, executing trades on behalf of their clients or for their own accounts. These entities are critical to the functioning of financial markets, as they provide liquidity, transparency, and efficient execution of securities transactions.
Given the significant sums of money involved and the various financial instruments they deal with, broker-dealers are subjected to stringent regulatory scrutiny including the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) areas. In the United States, these regulations primarily derive from the Bank Secrecy Act (BSA) and the USA Patriot Act. Under these regulations, broker-dealers are required to maintain comprehensive records of financial transactions and report suspicious activities to the Financial Crimes Enforcement Network (FinCEN) when potential money laundering is detected. Recently, broker-dealer firms were a key focus of the SEC’s AML efforts, representing a substantial portion of enforcement actions.
Broker-dealers play a pivotal role in the operation of financial markets by offering liquidity, transparency, and effective execution of securities transactions. Undoubtedly, their significance in the financial industry is paramount, as they facilitate investor access to a wide range of financial instruments, risk management, and the orderly operation of markets. Likewise, the adherence of broker-dealers to compliance standards is equally crucial to maintaining the integrity and trustworthiness of these markets.
Some of the major compliance regulations that impact broker-dealers in the U.S. include:
This foundational legislation governs the trading and registration of securities and establishes requirements for market participants, including broker-dealers. It also created the U.S. Securities and Exchange Commission (SEC), which plays a central role in regulating broker-dealers.
Broker-dealers are obligated to comply with AML regulations to prevent and report suspicious transactions and money laundering activities. These regulations include the Bank Secrecy Act (BSA) and the USA Patriot Act, which require the maintenance of customer identification and transaction monitoring procedures. The Bank Secrecy Act, enacted in 1979, establishes the foundational AML compliance framework for all financial institutions, including banks and broker-dealers. Under the BSA, broker-dealers are subject to regulatory oversight by the U.S. Treasury. They are mandated to maintain records of financial transactions and, when detecting suspicious activity suggestive of money laundering, report such instances to the Financial Crimes Enforcement Network (FinCEN). Specific provisions regarding broker-dealers can be found in Part 1023 of the BSA (31 C.F.R. §§ 1023.100 et seq.).
The USA Patriot Act, introduced in 2001 following the September 11 terrorist attacks, serves as a legislative enhancement to the BSA. Its primary purpose is to fortify AML efforts by focusing on improving customer due diligence and monitoring measures. The Patriot Act necessitates that broker-dealers establish and execute a written, risk-based AML program. This program should encompass policies, procedures, and controls that are reasonably expected to ensure compliance with the BSA. Furthermore, the AML requirements outlined in the Patriot Act should support:
These are just a few of the major compliance regulations that broker-dealers in the United States must navigate. Compliance is essential to maintain market integrity, protect investors, and ensure the smooth functioning of the financial system. The regulatory landscape may evolve, so broker-dealers must stay updated on changes and adapt their compliance programs accordingly.
In this section, we will walk you through the process of building a broker-dealer compliance program that not only keeps your business on the right side of the law but also fosters trust and confidence with clients and regulators.
The first step in building a compliance program is understanding the regulatory landscape. Broker-dealers are subject to various rules and regulations, including those imposed by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and state securities regulators. It’s crucial to have a clear grasp of the rules that apply to your specific business model and the jurisdictions in which you operate.
The next vital component is assembling a dedicated compliance team. Your team should be composed of professionals with in-depth knowledge of securities regulations, and they should be responsible for ensuring that your firm operates in compliance with all relevant laws. Training and ongoing education are essential to keep your team up to date with changing regulations.
In light of FINRA’s focus on firm culture during examinations, it is crucial for brokerages to bestow CCOs with increased decision-making authority. CCOs should function as the center of the firm’s culture, steering and molding the organization’s ethical character while upholding compliance with regulatory requirements. To cultivate the desired culture, it’s imperative to establish open lines of communication between CCOs and C-Suite leadership and equip them with cutting-edge regtech tools to enhance the monitoring of Suspicious Activity Reports (SARs) and employee surveillance.
With your team in place, the next step is to develop comprehensive compliance policies and procedures. These documents serve as the foundation of your program, outlining how your firm will meet its regulatory obligations. Key components to consider include:
Conduct a thorough risk assessment to identify areas where your firm might be vulnerable to compliance issues. This assessment should consider the nature of your business, the types of securities you deal with, and the specific risks associated with your operations. Based on the findings, prioritize your compliance efforts to address high-risk areas first.
Although the SEC presently permits brokerages to depend on their registered investment adviser (RIA) counterparts for Anti-Money Laundering (AML) protection, recent actions taken by FINRA present a different perspective. FINRA’s enforcement efforts target brokerages engaged in high-volume transactions of microcap or penny stock securities, deeming them “high-risk business models.” Consequently, risk assessments must be tailored to the size, scale, and extent of a brokerage’s operations, demanding a comprehensive evaluation of trading technology, personnel, business partners, and transaction-monitoring systems. Relying solely on AML controls within the RIA sector is not a sufficient approach for broker-dealers.
Once your policies and procedures are in place, it’s crucial to provide training to all employees. Ensure that everyone in your organization understands the importance of compliance and is aware of the specific requirements they need to follow in their roles. This training should be ongoing, with regular updates and refresher courses.
Compliance is not a one-time effort; it requires ongoing monitoring and testing. Implement systems and controls that allow you to track and verify compliance with your policies and procedures. Regularly review your operations, conduct compliance audits, and address any identified issues promptly.
Accurate and thorough record-keeping is a cornerstone of any compliance program. Ensure that all required records are maintained, and establish a robust reporting system to promptly notify regulators of any significant compliance breaches.
Securities regulations are not static; they change over time. Stay informed about regulatory updates and be prepared to adjust your compliance program accordingly. This includes making necessary updates to policies, procedures, and employee training.
In addition to the technical aspects of compliance, it’s crucial to foster a culture of compliance within your organization. Employees should understand the importance of adhering to the rules and regulations, not just as a legal requirement but as a commitment to ethical business practices.
Maintain open and transparent communication with regulators. Respond to inquiries promptly and cooperate with examinations or investigations as required. A positive relationship with regulators can be beneficial in case of any compliance issues.
The SEC is actively addressing BD-employee confidentiality agreements that contravene Section 21F-17 of the Securities Exchange Act of 1934, designed to shield whistleblowers. It is imperative that broker-dealers guarantee that their compliance manuals, codes of ethics, employment agreements, and severance agreements overtly provide protection for employees who report misconduct. This emphasis on protecting whistleblowers aligns with regulators’ increased focus on organizational culture during examinations in the brokerage industry.
Regtech solutions empower broker-dealers to efficiently manage large volumes of data, monitor transactions, conduct risk assessments, and ensure adherence to stringent regulatory requirements. By automating routine tasks, regtech frees up compliance professionals to focus on more strategic and complex issues, ultimately improving the overall effectiveness and accuracy of compliance efforts. In an ever-evolving regulatory landscape, regtech has emerged as a crucial asset for broker-dealers, enabling them to stay ahead of compliance challenges and minimize the risk of penalties and reputational damage.
VComply automates and streamlines the complex compliance and reporting obligations of broker-dealers providing a comprehensive solution that addresses the unique challenges within the financial services sector and enhances operational efficiency.
VComply helps you manage your intricate regulatory landscape, including the Securities Exchange Act of 1934, Investment Advisers Act of 1940, SEC rules and regulations, data protection standards such as GDPR and CCPA, as well as AML and KYC compliance requirements, along with the mandates of regulatory bodies like SEC, FINRA, and state securities authorities.
Building a broker-dealer compliance program is a complex but vital task for any firm operating in the securities industry. By understanding the regulatory landscape, creating a compliance team, developing policies and procedures, conducting risk assessments, and prioritizing training and monitoring, you can establish a program that not only keeps your business in compliance but also instills confidence in clients and regulators. Compliance is not a one-time effort; it’s an ongoing commitment to ethical and legal business practices.
Explore what makes VComply a consistent G2 high performer in Compliance Management. Request your demo today and transform your approach.
Ready to set up a trial of VComply and automate your compliance process?