Branch exams are a critical part of every broker-dealer’s system of compliance and controls, and must address risk while ensuring your firm is complying with relevant rules and regulations. Branch exams are more than just walking into a location and working from a standard checklist. Branch location types, business lines, products, firm changes and varying state regulations should all be addressed in your exam modules, and procedures for handling unacceptable risks or deficiencies should be in place.
Regulators focus their attention and resources on areas where they believe the risk is greatest. Firms should produce data to enhance understanding of its business and outlying practices, rather than having regulators point them out.
Firms should:
- Produce data to conduct a thorough pre-audit process, including transactional data involving particular branches;
- Interview the right people before going to a branch to ensure understanding of the unique challenges and risks including supervision teams, surveillance and business support;
- Have a pre-defined process to address issues that arise during the exam;
- Work with examiners to ensure they have the knowledge and skills necessary to effectively complete the exam;
- Prepare branch supervisors and financial professionals for branch office exams; and
- Produce data that helps create an understanding of enterprise wide risks and determine what additional resources may be required (training, technology, procedures, people) to enhance the firm’s compliance program.
The Oyster Difference:
Oyster Consulting knows that each compliance program should be unique, matching your business practices. Oyster provides both branch office on-site examinations outsourcing and program development assistance to improve your control environment. Our experts have years of industry experience and can quickly prioritize the assessment with a thoughtful process. Oyster will review each Branch Exam program to ensure you are addressing risk while complying with relevant rules and regulations.
Oyster Consulting recently partnered with the NSCP and Raymond James & Associates, Inc. to produce an educational webinar: Creating and Executing Effective, Customized Branch Examinations.
Oyster Solutions software is a highly-customizable platform designed to make your firm’s risk assessment and branch office reviews and exams more efficient and effective. Oyster Solutions provides a risk inventory based on the products you offer, the structure of your organization, relevant regulations and the business processes you use. Part of this risk inventory includes a detailed, role-based branch office exam.
About The Author
Bill Reilly
Bill Reilly is a respected financial services professional with over 35 years of consulting and regulatory experience. Bill leverages his industry expertise and relationships with state and federal regulators and self-regulatory organizations to guide broker-dealers, investment advisers and law firms providing legal representation through both proactive and reactive regulatory processes and compliance issues.
