The ESI Compliance Alliance is a quarterly publication that summarizes industry news and/or regulatory events that may impact our business. The Compliance Alliance focuses on providing best practices and guidance that will help your business remain compliant with industry regulations. This publication is created by ESI Compliance with the intention of supplementing the ESI Written Supervisory Procedures.
ESI Compliance is here to assist you and your business in meeting regulatory requirements. We strive to deliver seamless service and partner with you to ensure ESI is meeting regulatory requirements. ESI Compliance can be contacted at 800-344-7437.
WE PROTECT OUR STAKEHOLDERS THROUGH A SOLUTIONER-DRIVEN MINDSET THAT PRIORITIZES INNOVATION AS A COMPETITIVE
ADVANTAGE.
Survey and Branch Exam Feedback
Thank you for sharing your feedback in 2021! We are listening and taking action. During the course of the 2021 FOSJ branch exam program, ESI Branch Examiners gathered feedback from field agencies. The feedback was collected, tracked, and shared with senior leadership each quarter. Additionally, feedback received through the recent ESI survey was reviewed and shared. Your feedback helped us identify both opportunities and challenges, each of which we will focus on in 2022. We hope to continue to collect and share your feedback in 2022.
Ease of Doing Business
Continuing Education – Making this requirement straight forward
Securities CE: When do I have to do what?
In the world of insurance and securities, there are many different types of trainings and continuing education that both insurance agents and registered representatives must complete on a regular basis. If you’re lucky enough to be an insurance agent and a registered representative, then you’re lucky enough to have to do all of them! The following information is to help break down some of the differences in the securities portion and to help clarify why you have to do what, and when. Click here for helpful guidance.
2021 Branch Exam Results
In 2021 a total of 229 field examinations were conducted by Compliance as well as Field Supervisors. These examinations identified a variety of exam observations and several trends were identified. Click here to review 2021 exam trends as well as helpful tips to remain compliant.
Recent Field Notifications
Field Notice 2021-32 Confidentiality Agreement
Field Notice 2022-05 ESI Written Supervisory Procedures Update
Field Notice 2022-06 EFA Written Supervisory Procedures Update
Recent Regulatory Actions and Compliance Guidance
October 8, 2021 (Involving an unregistered person in activities that require registration)
An AWC was issued in which RR Jennifer Ayers was barred from association with any FINRA member in all capacities. Ayers failed to provide on-the-record testimony in relation to a FINRA investigation. The investigation stemmed from a Form U5 filed by her member firm that terminated her after allegations that she involved an unregistered person in activities that require registration. Full Regulatory Action
Compliance Guidance
Persons with access to ESI books and records or customer funds/securities must be fingerprinted and undergo a background check. Anyone who has access to office records, systems, equipment, or mail must be fingerprinted because they have access to ESI books and records, monies, or securities. This includes administrative or mail room staff, receptionists, temporary employees, and summer or short-term interns. ESI books and records include, but are not limited to: office records, client files, product/account applications, transaction blotters/activity logs, customer checks, stock certificates, agency systems or equipment, correspondence, advertising, or mail.
October 6, 2021 (Outside Business Activities)
An AWC was issued in which RR William Fochi Jr. was fined $10,000 and suspended from association with any FINRA member for four months. Fochi consented to the sanctions and to the entry of findings that he engaged in an OBA without disclosing or providing prior written notice to his member Firm. Full Regulatory Action
Compliance Guidance
An outside business activity (“OBA”) is defined by FINRA as being an employee, independent contractor, sole proprietor, officer, director or partner of another person, or being compensated, or having the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm. Compensation is not just commissions or salary. It may include stock, products, or services provided in lieu of cash. For additional guidance please view the OBA Field Notification.
Compliance Corner
Meet Your Compliance Team:
Kyla Ward, Compliance Analyst
Kyla Ward joined ESI Compliance as a Compliance Analyst in August 2021. She works within the Electronic Communications team and comes to ESI from LPL Financial, where her last position held was Associate Service Consultant within the Compliance and Registration team. Prior to that she worked on a Specialized Client Services Team assisting advisors and their clients with the Firm’s remediations.
Kyla holds FINRA Series 7 and 24 registrations. Kyla aims to utilize her experience to partner with you and become a long-term resource for your business.
Compliance Directory
ESI Compliance is here to partner with you. Please let us know if we can assist you and your business in meeting regulatory requirements. Click here for the Compliance Directory.
TC126252(0422)1