Articles Posted in Broker-Dealers

Mary Ann Gadziala, an associate director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations, says that broker-dealers often do not follow written supervisory procedures.

Speaking to an audience on broker-dealer regulation at the ALI-ABA conference on January 11, Gadziala says that this finding often comes up during examinations. She also said that although firms may have good written procedures, the practices were not necessarily consistent, but that she was reluctant to recommend the outsourcing of the creation of these written procedures that tended to be standardized-and that these procedures were not in compliance with the law if they did not cover the firm’s actual business activities.

Gadziala commented that she thought centralized or automated surveillance, rather than manual monitoring processes, should be used by high-volume firms. She did, however, say that the SEC has been working to develop manual (as opposed to electronic) monitoring for branch office supervision, procedures and staffers, and the suitability of products that were sold to clients.