Services

RAD PARTNERS, LLC has the experience needed to properly advise clients, draft required documents, and help to ensure broker-dealer compliance with mandated SEC and FINRA requirements, as outlined below.

Broker-Dealers:

New Membership Application

Requirements for a new broker dealer include:

  • Preparation of all the underlying requirements for and completion of the Online Form NMA
  • Completion and submission of Form BD
  • Individual Licensing and Registrations
  • Completion and submission of the New Member Assessment Report
  • Completion and submission of the Security Sales Activity Statement
  • Completion and submission of the CRD Entitlement Forms
  • Completion and submission of Fingerprint cards
  • Preparation of your business plan
  • Development of a continuing education program including written training plans and needs analysis
  • Development of custom Written Supervisory Procedures, closely tailored to business model and supervisory structure (as required by FINRA), including sales practices for retail and institutional brokerage, insider trading, electronic communications, research, trade reporting, supervisory controls, etc.
  • Development of a business continuity plan
  • Development of an anti-money laundering program
  • Application for fidelity bond
  • Initial brokerage accounting consulting, including net capital computation
  • Clearing firm selection, negotiation, and implementation
  • Preparation for, and attendance of, FINRA membership interview
  • Responses to FINRA information requests
  • Interface with FINRA examiners

Continuing Membership Application

FINRA requires firms to file a continuing membership application (CMA) whenever they seek to expand their operations or activities, and for other business events, including a plan to buy, sell or restructure a broker-dealer’s ownership. Firms also must file an application whenever they seek to modify or remove restrictions previously imposed in a membership agreement (a membership agreement change or MAC).

RAD PARTNERS, LLC can provide the following services:

  • Lead you through the application process
  • Draft your application letter, any additional procedures and process the required forms
  • Help you gather and assemble the required FINRA information
  • Respond to any additional documentation request
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General Compliance:

RAD PARTNERS, LLC offers assistance to firms in complying with SRO Rules, and federal securities laws and regulations, as well as analysis of new Regulation and the implementation of required responses. You can rely on RAD Partners, LLC to identify potential issues and develop or revise procedures to address material gaps in compliance. RAD Partners, LLC has the experience and expertise to help your broker-dealer achieve compliance with the following:

Supervisory Controls, Audits and CEO Certification (FINRA Rules 3120-3130)

3120. Supervisory Control System

(a) Each member shall designate and specifically identify to FINRA one or more principals who shall establish, maintain, and enforce a system of supervisory control policies and procedures that:

(1) test and verify that the member's supervisory procedures are reasonably designed with respect to the activities of the member and its associated persons, to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules; and

(2) create additional or amend supervisory procedures where the need is identified by such testing and verification. The designated principal or principals must submit to the member's senior management no less than annually, a report detailing each member's system of supervisory controls, the summary of the test results and significant identified exceptions, and any additional or amended supervisory procedures created in response to the test results

3130. Annual Certification of Compliance and Supervisory Processes

(a) Designation of Chief Compliance Officer(s)

Each member shall designate and specifically identify to FINRA on Schedule A of Form BD one or more principals to serve as a chief compliance officer.

(b) Annual Certification Requirement

Each member shall have its chief executive officer(s) (or equivalent officer(s)) certify annually, that the member has in place processes to establish, maintain, review, test and modify written compliance policies and written supervisory procedures reasonably designed to achieve compliance with applicable FINRA rules, MSRB rules and federal securities laws and regulations, and that the chief executive officer(s) has conducted one or more meetings with the chief compliance officer(s) in the preceding 12 months to discuss such processes.

Written Supervisory Procedures

Each member shall establish, maintain, and enforce written procedures to supervise the types of business in which it engages and the activities of its associated persons that are reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules.

Anti-Money Procedures and Audits

The Bank Secrecy Act, among other things, requires financial institutions, including broker-dealers, to develop and implement AML compliance programs. Members are also governed by the anti-money laundering rule in FINRA Rule 3310.

FINRA Rule 3310 sets forth minimum standards for broker-dealers' AML compliance programs. It requires firms to develop and implement a written AML compliance program. The program has to be approved in writing by a member of senior management and be reasonably designed to achieve and monitor the member's ongoing compliance with the requirements of the Bank Secrecy Act and the implementing regulations promulgated thereunder. Consistent with the Bank Secrecy Act, FINRA Rule 3310 also requires firms, at a minimum, to:

  • Establish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of suspicious transactions;
  • Establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and implementing regulations;
  • Provide for annual (on a calendar-year basis) independent testing for compliance to be conducted by member personnel or by a qualified outside party. If the firm does not execute transactions with customers or otherwise hold customer accounts or act as an introducing broker with respect to customer accounts (e.g. engages solely in proprietary trading or conducts business only with other broker-dealers), the independent testing is required every two years (on a calendar-year basis);
  • Designate and identify to FINRA (by name, title, mailing address, e-mail address, telephone number, and facsimile number) an individual or individuals responsible for implementing and monitoring the day-to-day operations and internal controls of the program. Such individual or individuals are associated persons of the firm with respect to functions undertaken on behalf of the firm. Each member must review and, if necessary, update the information regarding a change to its AML compliance person within 30 days following the change and verify such information within 17 business days after the end of each calendar year.

FinCEN

FinCEN publishes important advisories with detailed information about a variety of money laundering threats. These advisories should be reviewed on a regular basis to ensure that you take advantage of the information provided as appropriate.

Office of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control (OFAC), a Bureau of the Treasury Department, The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze foreign assets under US jurisdiction.

Customer Identification Program Requirements

A CIP must include procedures for making and maintaining a record of all information obtained to verify a customer's identity. At a minimum, the record must include all the identifying information gathered by the firm about a customer.

With regard to verification, a firm's records must contain a description of any document that was relied on to verify the customer's identity, noting the type of document, any identification number contained in the document, the place of issuance, and, if any, the date of issuance and expiration date.

With respect to non-documentary verification, the rule requires that records contain a description of the methods and the results of any measures undertaken to verify the identity of a customer.

Finally, the rule requires, with respect to any method of verification chosen, a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained.

Electronic Records

FINRA 3110: Requires each firm to preserve accounts, records, and correspondence in adherence with applicable laws and FINRA rules, regulations and policy statements, as well as those prescribed by SEC Rule 17a-3.

FINRA 3010: Requires firms to maintain a system to supervise transactions and correspondence with their users. Companies should establish and maintain a supervisory system with written procedures, reviewing incoming and outgoing electronic correspondence on a regular basis.

SEC 17a-3-4: Require that firms maintain written, enforceable retention policies, searchable indexes of all data stored, provide viewable and readily retrievable data, and securely manage data offsite in tamper-proof storage media.

Business Continuity Planning

Rule 4370—FINRA's emergency preparedness rule—requires firms to create and maintain business continuity plans (BCPs) appropriate to the scale and scope of their businesses, and to provide FINRA with emergency contact information.

  • Continuing Education

Continuing education consists of two mandatory programs: a Regulatory Element and a Firm Element.

The Regulatory Element

The Regulatory Element requires all registered individuals to complete a computer-based training program within 120 days of the second anniversary of their registration approval dates and every three years thereafter. The program focuses on compliance, regulatory, ethical and sales practice standards. Its content is derived from industry rules and regulations, as well as widely accepted standards and practices within the industry. Regulatory Element Programs have been developed for registered supervisors/principals (S201), Series 99 Operations Professionals (S901), Series 6 Investment Company Products/Variable Contracts Representatives (S106), and the General Program (S101) for Series 7 registrants and individuals in other registration categories not covered by the other programs.

The Firm Element

The Firm Element requires broker-dealers to establish a formal training program to keep covered registered persons up-to-date on job- and product-related subjects. In planning, developing and implementing the Firm Element, each broker-dealer must consider its size, structure, scope of business and regulatory concerns. Each broker-dealer must administer its Firm Element Continuing Education Program in accordance with its annual Needs Analysis and Written Training Plan, and must maintain records documenting the content of the program and completion of the program.

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Hedge Funds/Private Equity Funds

Fund Startup & Formation Advisory Services

RAD PARTNERS, LLC can assist Funds with the following:

  • Legal Hedge Fund Formation

  • Service Provider Due Diligence & Selection Assistance with:

    • Fund Administrators

    • Attorneys

    • Prime Brokers

    • Auditors

    • Accountants

    • Graphic Designers

  • Registration of Funds and individuals
  • Review of Private Placement Documentation
  • Review of Investment Management Agreements
  • Creating a compliance program consistent with regulatory standards
  • Draft policies and procedures
  • Conduct a detailed risk assessment and control review
  • Define and implement technology solutions for Fund Management

 

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