Broker-dealers have begun receiving requests from SEC examiners asking them to justify and explain their registered reps’ investment recommendations, a panel of attorneys and former regulators said
Broker-dealers have begun receiving requests from SEC examiners asking them to justify and explain their registered reps’ investment recommendations, a panel of attorneys and former regulators said
“I’d expect them to look for patterns of recommendations of high-cost products, patterns of exchanges, selling of complex or risky products and significant trading activity, especially if that trading activity doesn’t align with customers’ risk tolerance,” said Ed Wegener.
SEC examiners are “looking at patterns of complaints and what that is telling firms about the quality of recommendations,” when doing data analysis. They’ll be looking for patterns of concern and asking you to respond.
While the focus on product will vary from firm to firm, examiners will want to see consistency in how reps make recommendations and how firms monitor and address issues, panelists said.
La Meer Inc. offers the comprehensive GRACE cloud solution that offers the Registered Reps and Advisors a Portal to select the right products, record their recommendations as well as the Compliance Portal for continuous and proper oversight.
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