ESI Written Supervisory Procedures Update
ESI continually reviews its Written Supervisory Procedures (“WSP”) in accordance with regulatory and business requirements. Effective January 31, 2022, ESI’s WSP manual has been updated to incorporate various changes. Among others, the substantive changes are summarized below.
Summary of changes
| # | Title | Update |
| 2.6.1 | Gifts To Others | Added a bullet stating that giving/receiving cash or cash equivalents is prohibited. |
| 5.10.5.7 | Specific Information Security Requirements | Added that RRs and Associated Persons are not permitted to obtain passwords from a client to access a client’s account information or other PII (even with the client’s permission). |
| 5.10.6.6 | Physical Access to Company Premises | Added reference to the ESI Confidentiality Agreement being required for branch offices and FOSJs whenever a third-party or other outside vendor may have access to ESI’s confidential client information or records. |
| 5.13.5 | Social Media, Blogs, Web Sites And Other Electronic Communication Systems | Added details on what social media is, permissible social media, the approval process, third party social media sites, complaints, and legal liability. |
| 6.3.7 | Temporary Relief for Remote Inspections | Updated use of remote inspections for 2022 as a result of FINRA guidance on COVID relief. |
| 10.1.5 | Addresses On Customer Accounts | Added DPO (Diplomatic Post Office) as an acceptable address. |
| 10.18 | Pension and Retirement Accounts | Updated to reflect new DOL Rule to include Permissible Transactions, Prohibited Transactions, PTE 84-24, PTE 2020-02, Impartial Conduct Standards, Disclosures, Annual Review, Self-Correction, and Requirements When Acting as a Fiduciary. For details and education on the DOL Rule, please visit: https://www.nationallife.com/agent/training/dol/dol-registered-reps |
| 10.19 | Foreign Accounts | Added clarification that the Firm cannot have accounts with a legal address in a foreign country. ESI will be removed as the broker/dealer or the account will become restricted if it is discovered that a client no longer has a legal U.S. address. |
| 11.18.6 | Training | Removed the requirement for supervisors to take structured products training if they have RRs under their supervision engaging in structured products. |
| 11.27 | Consolidated Audit Trail (CAT) Trade Reporting | Removed information on the Order Audit Trail System (OATS) which was replaced with the Consolidated Audit Trail (CAT) Trade Reporting. |
Location of Manual
Please review the updated ESI’s Written Supervisory Procedures for details of the changes outlined in this notice. The manual may also be found on the NLG Website, under “Compliance” –> “ESI Compliance” –> “ESI Policies and Procedures” –> “ESI Written Supervisory Procedures”.
QUESTIONS
If you have any questions regarding this notice, please feel free to contact ESI Compliance at 800-344-7437.
CLICK HERE TO VIEW FN2022-05 IN FULL
EFA Written Supervisory Procedures Update
ESI Financial Advisors (“EFA”) continually reviews its Written Supervisory Procedures (“WSP”) in accordance with the regulatory and business requirements. Effective January 31, 2022, ESI’s WSP manual has been updated to incorporate various changes. Among others, the substantive changes are summarized below.
Summary of changes
| # | Title | Update |
| 2.4.6 | Social Media | Updated to match updates to ESI’s WSPs (enhance information around) |
| 3.5 | Payments to Personal Service Entities | Added for IARs who have a Personal Services Entity (“PSE”) for the purposes of receiving compensation that would otherwise be paid to the IAR individually. For payment of services provided to the PSE in connection with activities as an IAR, a PSE Agreement is required. |
| 3.6 | Pension and Retirement Accounts | Updated to reflect new DOL Rule to include Permissible Transactions, Prohibited Transactions, PTE 2020-02, Impartial Conduct Standards, Disclosures, Annual Review, and Self-Correction. For details and education on the DOL Rule, please visit: https://www.nationallife.com/agent/training/dol/dol-registered-reps |
| 14.4.3 | IAR Process | Clarified that “annual” means in the past 365 days regarding the annual client contact. |
| 14.9 | Financial Plans/ Financial Consulting | Changed “check” to “payment” relating to financial plans since Advice Pay allows payment via credit card. |
| 14.9.1 | Investment Analysis Tools | Added the requirement that investment analysis tools, including financial planning tools, require approval by the ARU. |
Location of manual
Please review the updated EFA’s Written Supervisory Procedures for details of the changes outlined in this notice. The manual may also be found on the NLG Website, under “Compliance” –> “ESI Compliance” –> “ESI Policies and Procedures” –> “EFA Written Supervisory Procedures”.
QUESTIONS
If you have any questions regarding this notice, please feel free to contact ESI Compliance at 800-344-7437.
CLICK HERE TO VIEW FN2022-06 IN FULL
TC125510(0222)1