Every broker-dealer must establish, document, and maintain a system of written supervisory procedures reasonably designed to achieve compliance with applicable securities laws and regulations. The purpose of these procedures is to outline the specific steps that the broker-dealer will take to supervise its activities and employees. The procedures should be tailored to the specific risks associated with the broker-dealer’s business and should be updated as needed to reflect changes in the business or the regulatory environment.
There is no one-size-fits-all approach to developing broker dealer written supervisory procedures template. The procedures that are right for a particular broker-dealer will depend on a number of factors, such as the size of the firm, the complexity of its business, and the types of products and services that it offers. However, all broker-dealers should consider including the following elements in their procedures:
Elements of Broker Dealer Written Supervisory Procedures Template
The broker dealer written supervisory procedures template should contain at least the following elements:
- A description of the broker-dealer’s business activities
- A description of the broker-dealer’s supervisory system
- A description of the broker-dealer’s policies and procedures for preventing and detecting violations of applicable laws and regulations.
- A description of the broker-dealer’s disciplinary procedures.
- A description of the broker-dealer’s recordkeeping procedures.
The broker-dealer should also consider including the following elements in its procedures:
- A code of ethics
- A compliance manual
- A training program for employees
- A system for monitoring and reviewing compliance with the procedures.
Supervisory Responsibilities
The broker-dealer’s supervisory responsibilities include:
- Establishing and maintaining a system of written supervisory procedures.
- Reviewing the supervisory procedures at least annually and updating them as necessary.
- Providing training to employees on the supervisory procedures.
- Monitoring compliance with the supervisory procedures.
- Investigating any suspected violations of the supervisory procedures.
- Taking appropriate disciplinary action for any violations of the supervisory procedures.
Record Keeping
The broker-dealer must maintain records of all supervisory activities, including:
- The written supervisory procedures
- The training provided to employees on the supervisory procedures
- The monitoring of compliance with the supervisory procedures
- The investigations of any suspected violations of the supervisory procedures.
- The disciplinary action taken for any violations of the supervisory procedures.
The broker-dealer must maintain these records for at least three years and must make them available to the SEC upon request.
Conclusion
Broker dealer written supervisory procedures template are an essential part of any broker-dealer’s compliance program. By establishing and maintaining a system of written supervisory procedures, broker-dealers can help to ensure that they are in compliance with applicable laws and regulations and that they are taking steps to prevent and detect violations.
Failure to maintain adequate supervisory procedures can have serious consequences for broker-dealers, including fines, sanctions, and even criminal charges. Therefore, it is important for broker-dealers to take the time to develop and implement a comprehensive system of written supervisory procedures.
