DSG-Network.com: Annual Review

Annual Review of Compliance Systems and Procedures

As part of the new Supervisory Controls Procedures, NASD Rule 3013 requires "each member firm’s chief executive officer (CEO) to certify annually that senior executive management has in place processes to: (1) establish, maintain, and review policies and procedures reasonably designed to achieve compliance with applicable NASD rules, Municipal Securities Rulemaking Board (MSRB) rules, and federal securities laws and regulations; (2) modify such policies and procedures as business, regulatory, and legislative changes and events dictate; and (3) test the effectiveness of such policies and procedures on a periodic basis, the timing of which is reasonably designed to ensure continuing compliance with NASD rules, MSRB rules, and federal securities laws and regulations."¹

The NASD has required an annual review of policies and procedures for many years. The new rules, however, require a review by persons who are independent of the compliance process and necessitate an annual certification by the CEO of the firm that proper procedures are in place.

DSG can conduct an independent review and test of your compliance systems and procedures and provide your firm with written recommendations on suggested changes, all designed to comply with Rules 3010, 3012, and 3013. This assessment will involve a detailed analysis of your Written Supervisory Procedures (WSP) and AML procedures, as well as an onsite visit to evaluate how the firm’s systems comply with the various rules and your WSP. When the examination is completed and recommended changes have been implemented, you will have an independent review and test that will give the CEO the confidence to make the above certification.

Remember, this certification must be made by the firm’s CEO on or before December 1st, 2005! Please contact us right away so we can schedule this review and test, allowing ample time for us to provide you with a written report and for you to implement any necessary changes prior to the December 1st certification deadline.

¹NASD Notice to Members 04-71