Mississippi Sends IARs Back to School; IARD and CRD Renewal Season Starts; and Regulators Provide Tips on Vendor Due Diligence; Regulatory Update for October 2021

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For Investment Advisors

Mississippi Adopts Model Rule for investment adviser representative (IAR) Continuing Education. In November 2020, the North American Securities Administrators Association (NASAA) members approved a model rule to implement continuing education programs for investment adviser representatives (IARs). The model rule requires IARs to complete 12 hours of continuing education (CE) annually, including six hours on ethics and professional responsibility and six hours focused on products and practice. NASAA’s objective was to keep IARs up to speed on regulatory requirements and best practices. Mississippi is the first state to adopt this model rule, and Michigan, Nevada, Vermont, and Wisconsin are not far behind. In addition, IARs who are also registered with as broker-dealer representatives that take required FINRA CE courses may apply six credits of Products and Practices toward IAR CE, provided that the FINRA CE content meets specific baseline criteria. Contributed by Cari Hopfensperger, Senior Director

For Broker-Dealers and Investment Advisors

Mark Your Calendars: The IARD and CRD Renewal Programs Have Begun; Renewal Payments Due December 13, 2021: To get detailed information about the 2022 Annual Renewal Program, including the complete timeline, payment methods, helpful tips, and FAQs, click the following links:

FINRA Annual Renewal Overview

IARD Renewal Program Overview

  • 11/08/2021 - Preliminary Statements will be available.
  • 12/13/2021 – Full payment must be available in the Renewal or Flex-Funding Account.
  • 12/26/2021 – Web CRD/IARD System Shutdown.

FINRA also included a feature on the Annual Renewal Page that enables you to add the renewal dates to your calendar with a couple of clicks! Contributed by Rochelle Truzzi, Senior Director.

Required Reading: FINRA’s Notice on Vendor Oversight and Due Diligence. FINRA has joined a couple of other regulators on the vendor oversight bandwagon, in its Regulatory Notice 21-29. The NFA issued its Interpretive Notice in February on NFA Rules 2-9 and 2-36; Members use of Third-Party Service Providers, and the Federal Reserve, FDIC, and the Office of the Comptroller of the Currency jointly issued their guidance in July. FINRA’s notice provides the regulator’s expectations on vendor supervision, provide examples from examinations about common failures, and tips on how to fulfill supervisory obligations. Contributed by Jaqueline Hummel, Managing Director.

For Private Funds (NFA Member Firms including CPOs/CTAs)

CPOs and CTAs Need to Up Their Game on Vendor Oversight. The NFA’s Interpretative Notice NFA Compliance Rule 2-9 and 2-36: Members’ Use of Third-party Service Providers goes into effect September 30, 2021. Private fund managers that operate as commodity trading advisors and commodity pool operators should read the interpretation to make sure their policies and procedures for third-party vendors include an initial risk assessment, onboarding due diligence, and ongoing monitoring. The NFA provided this resource page so firms can understand their obligations. Contributed by Jaqueline Hummel, Managing Director.

Photo Credit: Photo by Chris Lawton on Unsplash.

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