ABC INVESTMENTS
DUE DILIGENCE AND COMPLIANCE REVIEW PROCEDURES
THE FOLLOWING COMPLIANCE/VENDOR DUE DILIGENCE PROCEDURES WILL BE FOLLOWED BY
UNION, WHEN REVIEWING ABC INVESTMENTS.
CREDIT
1) AUDITED FINANCIALS
As part of our annual Due Diligence on ABC Investments we will review their audited
financials.
ABC is registered with the U.S. Securities and Exchange Commission (SEC) and as
such file audited financials that can be viewed on their website at www.sec.gov . It is
located under Filings / Request Public Documents / SEC Search Feature. To search by
company name enter ABC Investments or to search by CIK # use 0000810121.
2) BROKERCHECK
As part of our annual Due Diligence on ABC Investments and all Registered
Representatives associated with this Financial Institution we will review BrokerCheck.
BrokerCheck is the tool to research professional backgrounds of FINRA registered
brokerage firms, brokers, investment adviser firms and representatives. The information
comes from Central Registration Depository (CRD®), the securities industry online
registration and licensing database and the Securities and Exchange Commission’s
Investment Adviser Public Disclosure (IAPD) database.To access this information go to
Financial Industry Regulatory Authority (FINRA) at www.finra.org. The BrokerCheck link
should be on the home page. Follow the steps to look up ABC (CRD #19258) and the
Registered Representatives.
3) SIPC MEMBERSHIP
As part of our annual Due Diligence on ABC Investments we will review their
membership with the Securities Investor Protection Corporation (SIPC). This is done by
viewing the SIPC website at www.sipc.org and finding ABC under the member’s area.
4) ANNUAL AUDIT OF REGISTERED REPRESENTATIVES
As part of our annual Due Diligence on our Registered Representatives, we will review
their audit preformed by ABC. This will be done in a two step process.
1.
A designated representative of our financial institution will be present while the
compliance portion of ABC’s annual audit is conducted.
2.
We will review the finding regarding the audit when they are submitted by ABC to
us.
5) DISCLOSURES
We understand that we have a responsibility to oversee that all business transacted in
financial institutions by the registered representatives is not affiliated with the financial
institution. We will make periodic checks to make sure that registered representative is
located in a separate area from financial institution business, that proper ABC disclosure
signs are displayed and that the client acknowledges at the time of any new purchase
that they understand this relationship.
6) QUARTERLY REVIEWS
As part of our Due Diligence on our Registered Representatives, we will have a quarterly
meeting with them. At these meetings we will discuss and review at the very minimum
the following areas:
1. Review of Assets Under Management (AUM)
a. Any changes to AUM will be discussed and reviewed. Are there any major changes
due to market movement, new assets, lost of assets, etc?
b. Review of Commission/Fees
c. Overall review of income generated for the quarter and YTD
d. Products or Product Types
2. Review and discuss with the representatives about any added, changed or decided to
move away from any certain products or product types for any reason.
3. Review of Advisory
a. Have any advisory clients been added or deleted in the last quarter? Review of all
advisory assets, reviews, statements generated, services offered, etc.
ANNUAL CHECKLIST TO REVIEW NON-DEPOSIT
INVESTMENT AND INSURANCE PRODUCT ACTIVITIES
The following questions can be used to verify that the Credit Union is complying with all
applicable rules and guidelines relating to the offer of noninsured investment products and
services at the Credit Union:
YES
1. Audited Financials – Received and Reviewed?
2. BrokerCheck – Received and Reviewed for:
ABC Investments?
(individual name)
(individual name)?
3. Confirmation of SIPC Membership – Received and Reviewed?
4. Audit of Registered Representatives – Received and Reviewed?
Is the ABC sales area clearly distinct from retail deposit areas?
Are adequate customer disclosures being given?
Have sales confirmations and account statements been reviewed?
Has all advertising and promotional materials used in connection
with ABC services and products been reviewed?
Has all advertising contained adequate disclosures indicating the
the products are being offered by ABC and are not
insured and may result in loss?
5. Have all complaints been handled and/or resolved adequately?
6. Are the activities being performed in accordance with Board policy?
NO
QUARTERLY MEETING AGENDA TO REVIEW NON-DEPOSIT
INVESTMENT AND INSURANCE PRODUCT ACTIVITIES
The following agenda will be used for quarterly meetings between our Registered
Representatives and CREDIT UNION:
1. Review of Assets Under Management (AUM)
e. Any changes to AUM will be discussed and reviewed. Are there any major changes
due to market movement, new assets, lost of assets, etc?
f. Review of Commission/Fees
g. Overall review of income generated for the quarter and YTD
h. Products or Product Types
2. Review and discuss with the representatives about any added, changed or decided to
move away from any certain products or product types for any reason.
3. Review of Advisory
b. Have any advisory clients been added or deleted in the last quarter? Review of all
advisory assets, reviews, statements generated, services offered, etc.