Outside Brokerage Account Supervision
Keep employee trades in check
By automating transaction reviews of outside brokerage accounts
Automate employee notifications and their submissions of brokerage statements.
Systematically compare all employee trades against all client trading activity and restricted lists to prevent conflicts.
Instantly flag trades that may breach internal policies or FINRA rules.
Streamline submissions and maintain a full regulatory record for oversight.
Relevant rules
Addresses FINRA Rule 3210, which relates to the receipt, maintenance and review of employees’ outside brokerage account statements to prevent potential conflicts of interest or misconduct.
Common deficiencies
Failure to comprehensively review, for potential conflicts, the trading in associated persons’ outside brokerage accounts as compared to the trading of the firm’s clients.
Knowtice’s prevention plan
The platform imports the transactions from the associated persons’ brokerage statements by extracting the trade information from the PDF statements submitted by the employees.
The platform compares those to the entirety of the broker-dealer’s client transactions during the same period.
The system generates exceptions where trades breach internal policies (such as prevention of front-running) or when a trade might have potentially been placed based on non-public knowledge of client activity.
Real findings. Real fines
Recent fines of broker-dealers highlight the necessity of a comprehensive review of employee outside brokerage acitivities.
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Use our Outside Brokerage Account Reports tool to prevent costly fines!
Ready to see how it works?