2019’s Essential Tips To Help You Meet FINRA & SEC Requirements

8 Essential Requirements To Meet FINRA & SEC Requirements

To meet FINRA & SEC regulations, you must first understand what they require of investment firms and financial services organizations like yours. You must realize what’s classified as a violation of FINRA & SEC regulations, and ensure you put solutions in place to mitigate the risks of noncompliance.

FINRA & SEC Compliance Guidelines
ClearPath’s Guide To FINRA & SEC Compliance

However, knowing and understanding these regulations isn’t enough – you have to be able to meet the standards in place as well. Financial services and technology are truly united. You depend on technology to help you communicate with clients and partners, streamline processes and procedures, and work efficiently while meeting the needs of those you serve.

How Should You Go About Complying With FINRA & SEC Regulations?

Here’s are the top 8 tips for staying in line with these regulations:

1. Stay Up To Data On FINRA & SEC Guidance Changes

FINRA & SEC periodically release guidance letters that bring awareness to investment firms regarding cybersecurity practices, and the retention and transmission of data. These letters are typically precursors to final regulations, so you have to be careful and ensure you are keeping up with them.

2. Perform Regular Network Assessments

Regulators want to know if you’ve assessed your IT network to ensure it promotes compliance. You need to make sure that you, or whatever third parties you’re working with, have the capabilities to identify and manage the risk of data breaches and protect your investors’ confidential information.

3. Secure Your Data & Transmissions?

Securing digital communication between employees and your clients such as financial transactions, statements, and reconciliations are vital. Regulators want to know how your firm captures, retains and secures business communication between you and your investors, and who’s in charge of the actual supervision and monitoring.

4. Monitor The Security Of Your Digital Information

Do you have the knowledge to ensure your data is secure? This is an area where confidence is critical. Regulators want to know how you protect your clients’ data both in storage and in transit.

5. Implement A Cyber Security Policy

How often is your cybersecurity policy reviewed, updated, and reported on for accuracy with applicable regulations? Does your written policy align with the actual way you supervise security of digital information? What corrective-action measures are in place for infractions?

Your cybersecurity policy should act as a framework protecting IT assets. It should be clear and define:

  • Risk-mitigation measures.
  • Enforcement strategies and the consequences for violating policies.
  • A schedule of internal IT compliance reviews and assessments.

Establishing a formalized cybersecurity policy can reduce the risk of unsanctioned or potentially damaging inbound/ outbound communications, and instances that may draw unwanted attention to your firm from regulators.

6. Is Your IT Both Secure & Easy To Access?

If regulators come knocking:

  • Are you prepared to respond if they ask you to produce specific communication content?
  • Can you prove all types of communication that are being captured, reviewed, and retained and appropriately secured?
  • Can you retrieve and produce specific content promptly?

7. Invest In A Robust And Dependable Archiving Solution

Not all archiving systems are created equal. To comply, you must invest in a solution with a single platform that can retain, manage, and search across all channels, including social media, in its original context, keeping it in a search-ready state.

Comprehensive archiving platforms also help to eliminate content silos and offer solutions for more than just meeting compliance, such as e-discovery, escalation paths, and personal access to archived content.

8. Make Sure You Meet FINRA’s Proposed, Automated Regulatory Procedures

FINRA has proposed a technology-driven model called CARDS (the Comprehensive Automated Risk Data System) to compile trading data from approximately 4,000 brokerages that serve over 110 million investor accounts.

CARDS will automate and standardize the collection of data that FINRA now accumulates manually. They are using big data analytics to assess, in real time, where fraud occurs and use new tools to react to immediately.

FINRA requires that:

  • All sensitive data be encrypted.
  • IT systems are actively managed and monitored to detect and identify intrusions.
  • Firewalls and application services are configured to minimize direct connections to the Internet (including your databases).

Looking To The Future

Regardless of what type of IT solutions you put into place, they should be optimized for future technologies and content types. They also should be easy to update and scalable. Static or multiple standalone options that only target individual needs or requirements won’t be enough. Your firm requires comprehensive IT solutions that will ensure you always comply with FINRA & SEC regulations.

Looking for an IT Partner in Central Illinois that will help you implement a secure and robust IT environment? Get in touch with ClearPath IT Solutions at (309) 263-5600 or sales@clearpathit.com to learn about our data security, network assessment, and other vital IT services that will contribute to your FINRA and SEC compliance efforts.

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