News in Personal Trading Software & Compliance Monitoring Tools

What’s in the news: the top five compliance articles for June 11 – 24, 2022

Compliance innovation moves fast, but the news moves faster. To keep you and your team up to speed on the latest happenings and goings-on in the compliance world, we’ve aggregated the top five articles from the past few weeks to provide you with an in-depth look at the regulatory ecosystem.

Stay up-to-date and in the know on everything happening in the compliance world as of June 24, 2022.

Top five compliance articles

SEC spring rulemaking agenda signals potentially hectic fall for compliance – Author Aaron Nicodemus

“Final action by the Securities and Exchange Commission on its climate-related disclosure rule, whistleblower amendments, unimplemented elements of Dodd-Frank, and more could all take place by the end of the year, according to the agency’s spring agenda.”

Meet the LUMINARIES Class of 2022 Finalists – Author Janet Levaux

ComplySci has been named a finalist for the 2022 Luminaries in the categories Diversity and Equality – Individual (Amy Kadomatsu) and Executive Leadership. We are thrilled to be included among our top-ranking peers.

“An evolution of our Broker-Dealers of the Year awards, the LUMINARIES program is now in its second year. It aims to highlight how top-performing industry participants — both firms and individuals — produce meaningful results through efforts that matter most to advisors in Community Impact; Diversity, Equity & Inclusion; Executive Leadership; and Thought Leadership & Education.”

A New Policy Is Making Corporate Compliance Chiefs Uneasy – Author Dylan Tokar

Concerned about your personal liability as a CCO? You aren’t alone.

“Compliance officers are worried that a new Justice Department policy, aimed at raising their stature within companies, will actually make their jobs harder—and even leave them open to criminal prosecution.”

Concern regarding this new policy has been vocalized by many, with the crux of the opposition being that “the new policy would require both the company’s chief executive and chief compliance officer to personally certify that its compliance program is “reasonably designed to prevent and detect” future violations.” A requirement which some CCOs believe could open them up to liability should future compliance infractions occur.

How to Avoid Trouble With Ethics Codes, Nonpublic Information – Author Thomas D. Giachetti

“In April, the Securities and Exchange Commission’s Division of Examinations issued a risk alert to provide further information on common investment advisor examination deficiencies relating to Section 204A of the Investment Adviser Act and Rule 204A-1 under the Investment Adviser Act of 1940…

A key CoE [Code of Ethics] component is the requirement that access persons report and the advisor review their personal securities transactions and holdings. Required provisions must also address supervised person compliance with federal securities laws and the duty to report CoE violations to the chief compliance officer or their designee…

Advisors must develop procedures and safeguards to determine when staff members may be in possession of MNPI, particularly in relation to pending trades. As the alert suggests, any compliance issues stemming from inappropriate use of MNPI will be judged in hindsight (i.e., whether the firm adopted adequate procedures to detect or prevent improper use of MNPI). Employees should be trained on misuse and sharing of MNPI.”

SEC to propose new rules for online brokers’ game-like features – Author Bloomberg News

“The agency’s bid to impose restrictions on trading and investing apps popular with retail traders follows a review by the SEC of “digital engagement practices,” which critics refer to as the gamification of investing. Wall Street’s main regulator said last August that it was concerned that game-like features are putting investors at risk by encouraging excessive trading.

The rule plan, which was announced this week in a calendar of upcoming regulatory actions, could pose significant challenges for online brokerages and advisers. Under SEC rules, if a firm is offering investment advice or recommending securities it can face conduct standards that require putting clients’ interests first.”