Membership Application Program (MAP) Wednesday, May 23 9:45 a.m. 10:45 a.m.

Transcription

1 Membership Application Program (MAP) Wednesday, May 23 9:45 a.m. 10:45 a.m. Attend this session to learn about FINRA s Membership Application Program (MAP). Discussions include an overview of the application process including MAP s fast track/expedited review process as well as materiality consultations and tips for filing an application and avoiding common pitfalls. Additionally, panelists discuss recommendations from the Retrospective Review of the MAP rules. Moderator: Alissa (Lisa) Robinson Director FINRA Membership Application Program Panelists: Patricia Dorilio Application Manager FINRA Member Application Program James Webb Principal and Chief Executive Officer Cape Securities, Inc. James Williams Principal Financial Telesis, Inc Financial Industry Regulatory Authority, Inc. All rights reserved. 1

2 Membership Application Program (MAP) Panelist Bios: Moderator: Lisa Robinson serves as Director of the Membership Application Program (MAP) group at FINRA where she interacts with industry professionals on a wide range of topics including unique, novel, and/or complex products, platforms, large scale restructuring and other aspects of broker dealer business operations. She offers insight to both internal and external constituents with a focus on risk assessment, mitigation, strategy and collaboration. In addition, Ms. Robinson oversees FINRA s funding portal surveillance and examination program and directs the review of applications submitted by SEC-registered funding portals seeking FINRA membership pursuant to the crowdfunding provisions of Title III of the JOBS Act and SEC s Regulation Crowdfunding. Ms. Robinson often liaises with various regulatory agencies on issues related rules and regulations that impact the broker dealer community. Prior to joining MAP, Ms. Robinson was an Associate Director in FINRA s Member Regulation, Sales Practice Department, where she was responsible for the oversight and execution of the District 10 examination plan, including cycle, cause and branch examinations, for many member firms. She has participated on several FINRA initiatives, most recently FINRA s Retrospective Review of the MAP rules. She proposed and now administers MAP s Triage/Fast track program, which takes a risk-based approach to processing full FINRA member applications. Ms. Robinson has served as a panelist at numerous industry events on topics such as crowdfunding, examinations, supervisory controls, and ethics and has co-presented at FINRA Institute at Wharton, Crowdfunding session. Before joining FINRA, Ms. Robinson worked at a large mutual fund company. She is a Certified Regulatory and Compliance Professional (CRCP ) and holds a bachelor s degree from Nova Southeastern University. Panelists: Patricia Dorilio is Application Manager in the Membership Application Program (MAP) Group at FINRA, a position she has held since January Ms. Dorilio supervises application review staff in the execution of the examination/application review program, including the collection and analysis of information and documentation to determine applicants satisfaction of standards for FINRA membership, and standards for continuation of membership. Before joining FINRA in 2011, Ms. Dorilio was employed in the private sector, and immediately prior to that, was Special Counsel in the Division of Member Firm Regulation at the New York Stock Exchange. She began her career as an Assistant Attorney General in the Securities Bureau of the New York State Attorney General s Office. Ms. Dorilio earned her J.D. from the Maurice A. Dean School of Law at Hofstra University, and her B.A. in Political Science from Hofstra University. She is a member of the bar of the State of New York. Jim R. Webb, Principal and CEO of Cape Securities, Inc., began his career in 1990 as a financial planner and has continued to grow in the evolving industry. For 14 years of his 27 years, he worked for several fund and annuity companies as their regional wholesaler. In that time, he met with thousands of brokers and hundreds of broker dealers and was a valued partner in their growth. Mr. Webb s leadership skills, passion for improved services for his clients and reputation as a problem solver all contributed to his success as a wholesaler. In 2007, Mr. Webb became the owner of Cape Securities, Incorporated. Intent on overcoming the challenges of growing a FINRA compliant small firm, Mr. Webb determined that being actively involved in understanding and advocating on regulatory matters and forming strong networking relationships with other small member firms and FINRA was essential for the success and growth of his company. By his steady and enthusiastic joint commitment to his individual business interest and members of the industry as a whole, Cape has grown over the past 10 years from a tiny firm with just two financial advisors into a firm with just under 100 representatives serving customers nationwide. Mr. Webb is a member of the District 7 committee and he is on the Regulatory Advisory Committee (RAC). As a member of these committees Mr. Webb applied a practical and common-sense approach to balancing the needs of regulators, with the challenges faced by a small firm. Mr. Webb enjoys productive interaction with other FINRA members and staff in seeking solutions to problems that face the industry nationwide, he sought to serve and has served, both past and present. Mr. Webb has served as a panelist and speaker at many FINRA regional and National meetings. Topics covered include: How a small firm can best use social media, Changes in business and how to best consult the CMA/MAP groups and Outside Business activities, among others. He currently holds Series 4, 7, 8, 24, 28, 63, and 66 Securities Registrations and insurance licenses. While building his broker dealer he created and insurance agency and a SEC registered investment advisory to provide clients a true financial concierge Financial Industry Regulatory Authority, Inc. All rights reserved. 2

3 James H. Williams is a registered principal of Financial Telesis Inc. (FTI). He provides regulatory and compliance consulting for FTI. From 2014 through September of 2017, he was President and owner of Gogan & Williams, an accommodation broker dealer, located in northern California. That firm was sold in September, Mr. Williams has more than 30 years experience in the securities industry as a CFO, CCO, FINOP, President and owner. Mr. Williams began his securities career in 1985 as the CFO, CCO and FINOP for Planned Investments Inc., a general securities firm located in San Francisco, CA. In 1988, he became the Senior V.P., CFO and CCO for Grigsby Brandford, a municipal bond underwriting firm in San Francisco with branch offices in many major cities across the country. In 1992, he founded Financial Telesis Inc. (FTI), a California based broker dealer and RIA, specializing in providing services and support for retirement plan and wealth management representatives and advisors. At the time of its sale in July, 2014, FTI had more than 480 reps/advisors, and produced in excess of $81M of annual commissions and fees. He has extensive regulatory experience, including a three year term for the NASD District 1 Committee ( ), and was elected Chairman of that committee in He also served an additional three year term as a member of the FINRA District 1 Committee ( ). He was also a member of the 2010 FINRA Advisory Council. He was elected to the mid-size firm seat on FINRA s National Adjudicatory Council (NAC) for the term. He is a past President of the Board of Directors, San Francisco Chapter IAFP, and also served as Treasurer for the National Association of Independent Broker Dealers (NAIBD), a non-profit broker dealer industry association. He is currently a member of the Small Firm s Advisory Committee (SFAC). Mr. Williams has an undergraduate degree from the University of Maryland and an MBA from Golden Gate University Financial Industry Regulatory Authority, Inc. All rights reserved. 3

4 2018 FINRA Annual Conference May 21 23, 2018 Washington, DC Membership Application Program (MAP)

5 Panelists Moderator Alissa (Lisa) Robinson, Director, FINRA Membership Application Program Panelists Patricia Dorilio, Application Manager, FINRA Member Application Program James Webb, Principal and Chief Executive Officer, Cape Securities, Inc. James Williams, Principal, Financial Telesis, Inc. 1

6 To Access Polling Under the Schedule icon on the home screen, Select the day, Choose the Membership Application Program (MAP) session, Click on the polling icon: 2

7 Presentation Overview Structure and scope of MAP Materiality Consultations FINRA s Fast Track Program Tips for submitting matters Rule proposals impacting MAP 3

8 Structure and Scope of MAP Centralized Group Collaborative process between MAP and the District staff Inclusion of other internal FINRA Departments as needed Not just applications 4

9 Polling Question 1 1. Have you filed a MAP matter in the past 12 months? If so, did you file an: a. NMA (new membership application) b. CMA (continuing membership application) c. Materiality Consultation 5

10 FINRA s Fast Track Process What is Fast Track? Provides expedited review of low risk, less complex, nearcomplete matters. 6

11 Polling Question 2 2. For those that filed a MAP matter in the past 12 months, was your matter fast tracked? a. Yes b. No 7

12 Materiality Consultations Evaluating business changes or expansions to determine if an application is required. Notice to Members (NTM) (Membership Rules) describes criteria: The nature of the proposed expansion The relationship, if any, between the proposed new business line and the firm s existing business The effect the proposed expansion is likely to have on net capital The qualifications and experience of firm personnel; and Impact to existing financial, operational, supervisory and compliance systems. 8

13 Materiality Consultations How to submit and what to provide Firm Gateway Support why you believe the change is not material Provide an analysis of the firm s current business and why you feel the new business is similar based on the criteria in NTM Processed quickly (in most instances) The assessment is FREE! 9

14 Polling Question 3 3. For those that filed a materiality consultation, was your request deemed material? a. Yes b. No 10

15 Tips on Preparing for and submitting a CMA Contact your firm s Regulatory Coordinator to discuss the proposed change FINRA encourages applicants to have a pre-filing conversation with the staff. Be prepared Firms must demonstrate ability to conduct business prior to approval 11

16 Common Issues & How to Avoid Certain Delays Asset Transfers Discuss outstanding and / or pending customer claims including how they will be satisfied Funding and liquidity issues Make sure capital and liquidity of the firm are adequate to conduct the proposed activity. Evidence source of funding and financial wherewithal-be prepared to provide bank statements. Provide supporting documentation Agreements, corporate documents, minutes, etc. 12

17 Polling Question 4 4. For those that filed a CMA, did you request a Fee Waiver? a. Yes b. No 13

18 FINRA s proposals relating to MAP Highlights of Retrospective Review of MAP rules Regulatory Notice (Membership Application Program) What s next? 14

19 Wrap Up/Questions 15

20 FINRA Resources FINRA Regulatory Notices, 18-06,13-11, 12-32, Notice to Members, 04-10, and Guidance Relating to the Membership Application Program FINRA Fast Track/Triage Process Materiality Consultation Guidance 16

21 Membership Application Program (MAP) Wednesday, May 23 9:45 a.m. 10:45 a.m. Resources Notices FINRA Regulatory Notice 18-06, Membership Application Program, FINRA Requests Comment on Proposed Amendments to its Membership Application Program to Incentivize Payment of Arbitration Awards (February 2018) FINRA Regulatory Notice 13-11, Continuing Membership Application Fee Waiver Process, FINRA Provides a Process for Waiving CMA Fees for Less Significant CMA Changes and Refunding of NMA and CMA Fees for Applications Withdrawn Within 30 Days After Filing (March 2013) FINRA Regulatory Notice 12-32, Revised Fees, Changes to Advertising, Corporate Financing, New Membership and Continuing Membership Application, Central Registration Depository and Branch Office Annual Registration Fees (June 2012) Notice to Members 06-56, Business Expansions, SEC Approves Amendments to the Safe Harbor for Business Expansions (October 2006) Notice to Members 04-10, Membership Application and Continuation Rules, SEC Approves Amendments to Membership Application and Continuation Rules (Rules 1011, 1014, and 1017) (February 2004) Notice to Members 00-73, Membership Rules, SEC Approves Amendments To NASD Membership Rules (November 2000) Other FINRA Resources Guidance Relating to the Membership Application Program Financial Industry Regulatory Authority, Inc. All rights reserved. 1

22 FINRA Fast Track/Triage Process Materiality Consultation Guidance Financial Industry Regulatory Authority, Inc. All rights reserved. 2