Compliance Guidelines

Transcription

1 Compliance Guidelines The Written Supervisory Procedures (WSPs) are the official resource for Compliance & Supervisory Guidelines, which can be located on the SWS Financial Services, Inc. (SWSFS) website under the Compliance tab. The following information is not comprehensive, but is intended to list general guidelines and reiterate daily activities that should be followed. Each Registered Representative (RR) is responsible for becoming familiar with the WSPs for SWSFS. Your Office Communication of Firm Name When answering the telephone, SWS Financial Services should be mentioned if you are not using a Doing-Business-As (DBA) name. If you have an OSJ-approved DBA name, then you are not required to mention SWS Financial Services when answering the phone. Display of Firm Name and SIPC Symbol Each office location should clearly display the firm name, SWS Financial Services, Inc. in the area in which the RR conducts SWS business. In addition, the SIPC symbol must be displayed so that the public can easily view it, and usually takes the form of a sticker on the entryway door or glass. A complimentary 8½ x 11 inch stand-up sign and a SIPC symbol is provided by your OSJ Manager, which will fulfill both display requirements. Security of Customer & Office Records Customer files and records should be kept in a secure location, that is locked during nonbusiness hours. This location should prohibit inadvertent review of customer information by non-access personnel and also protect against theft. For more information about recordkeeping and offices, please refer to Section 6 and Section 11, Financial and Operations Procedures and Offices, respectively. As described in further detail below, all Required Files should be maintained in a secure, central location as well. Daily Activities Registered Representative Checklist Designed to streamline and organize many of your everyday responsibilities and recordkeeping requirements, you should utilize the Registered Representative Checklist. Detailed instructions are conveniently included on Page 2 of the checklist. You should send the checklist via or facsimile to your OSJ on or before the 15 th of the following month, in addition to other required monthly records, described below in Required Files & Forms. Page 1 of 18

2 Daily Activities - Continued Cancel & Corrects If you place a trade that needs to be cancelled or corrected, immediately notify Broker-Client Services (BCS) at , and complete a Cancel & Correct Form for submission. If the trade was your error, you will be charged $25.00 to amend the transaction. Mailing Documentation While the preferred delivery method is electronic mail ( ) for documentation where an original is not required, traditional mail delivery is still available. Regular Mail: Overnight Delivery: SWS Financial Services, Inc. SWS Financial Services, Inc. Attention: the Respective Person or Department Attention: the Respective Person or Department P.O. Box Elm Street, Suite 3500 Dallas, Texas Dallas, Texas Please note that SWS Financial Services, Inc. cannot be responsible or replace lost or stolen mail that does not reach the intended recipient. It is suggested to use a service that provides electronic tracking for delivery confirmation. Required Files & Forms (WSP 6.1.4) Client Files Client files should be maintained in a secure, central location, and be established for each client registration. These files should include, but not limited to: account application(s) signed by the client(s) and Registered Representative; copies of Direct Business Transmittal Form for Mutual Funds (DBT Forms) along with copies of the investment company s applications; all supporting account documents (e.g., trust agreements, corporate resolutions, partnership agreements, etc.), as well as broker-client discussion notes. Client files should be updated at least every 36 months or whenever there is a material or financial change. Checks Received/Disbursed This file should contain a log of all checks on the Checks Received/Disbursed Log, along with front & back copies of each check that has been forwarded to Southwest Securities, Inc., and/or mutual fund and annuity companies. Checks sent to Southwest Securities, Inc. should be stamped, For Deposit Only Southwest Securities. RemitPro users should keep copies of the End-Of-Day (EOD) report in this file. The Checks Received/Disbursed Log should be sent to your respective OSJ Manager on or before the 15 th of the following month. Page 2 of 18

3 Required Files & Forms - Continued Insurance Blotter/Monthly Stock Receipt This file should contain a log of all certificates forwarded from the RR to Southwest Securities, on the Insurance Blotter/Monthly Stock Receipt Log, and all certificates should be stamped Southwest Securities in the attorney field to make the certificate non-negotiable. Copies of the front & back of each certificate as well as stock powers should also be maintained in this file. Even if there are no stock certificates received/handled for the month, the Insurance Blotter/Monthly Stock Receipt Log should be sent to your OSJ Manager monthly. Direct Business (Non-CSS Transactions) This file should contain a chronological listing of all direct transactions on the Direct Business Trade Blotter, including mutual fund and annuity business. For direct mutual fund business, copies of new account applications and client checks should be sent to your supervising OSJ, and variable annuity and variable universal life business should be sent to Southwest Insurance Agency (SWIA) for review. The Direct Business Trade Blotter should be sent to your OSJ Manager monthly. Correspondence: Incoming and Outgoing These two (2) files should be maintained for all correspondence for the branch/office. An Incoming Correspondence file should contain copies of all written or faxed communications, including copies of attachments and enclosures, received by the office. An Outgoing Correspondence file should contain copies of all written or faxed communications, including copies of attachments and enclosures, sent by the office. Copies of all correspondence, including all applicable attachments and enclosures, should be sent to your OSJ Manager monthly for review. Note: and related attachments are reviewed & retained according to the WSP section, Electronic Communications, and do not need to be sent to your OSJ Manager. Gift & Gratuity This file should contain Regional OSJ Manager Approval of gifts given to or received from others in conjunction with the Firm s business, on the Gift & Gratuity Log. The amount of any gift or gratuity must be of nominal value (substantially less than $100). The Gift & Gratuity Log should also be sent to your OSJ Manager on or before the 15 th of the following month. Page 3 of 18

4 Required Files & Forms - Continued Advertising/Sales Literature/Seminars This file should contain copies of all drafts and final materials reviewed or approved by your Regional OSJ Manager and the Compliance Department, as well as distribution lists to which the materials were sent or presented. In addition, materials in this file should be maintained: from inception of Principal Approval; include the date of first use; and when possible a copy of the submission in its final publication. A completed Advertising and Sales Literature Review Form (ASLR Form) should accompany any materials submitted for review. For more details about advertising, sales literature and seminars, please refer to the section of the WSPs titled, Communications with the Public. Complaints: General, Option, and Municipal These three (3) separate files should include copies of written or verbal grievances by customers that involve SWSFS or Registered Representatives associated with SWSFS, and should be maintained even if empty. The files should also contain copies of all written complaints, as well as responses to complaints. Verbal complaints should be documented on a Verbal Complaint Form, and a copy of the form should be maintained in the appropriate complaint file. Upon receipt, copies of all complaints should be submitted to your Regional OSJ Manager. If you are unsure whether a customer letter is a complaint, always contact a Regional OSJ Manager or the Compliance Department. Order Tickets This file should contain order tickets for all trades called-in (not entered through CSS), including but not limited to, fixed income, equity and UIT orders. All necessary information should be documented on the order ticket including: customer name and account number; a complete description of the security; whether the security is being traded in cash margin or short account; if selling the security, where the shares being held; market, limit or stop order plus any additional trade conditions; principal or agent capacity; the time the customer gave the order; the time the order was placed, the execution time; whether solicited or unsolicited; and the commission, markup, or markdown. All open orders should be maintained in a separate file. Order tickets should be matched to the Daily Person Trade and Commission Blotter by date, and it is suggested that these be kept in trade date order. Outside Business Activities This file should contain Outside Business Activity Approval Forms, with Regional OSJ Manager approval. You should obtain written approval form your OSJ Manager(s) before engaging in any outside business activity. Page 4 of 18

5 Required Files & Forms - Continued Compliance Alerts This file should hold a copy of the alert issued and/or the Compliance Alert Log, either of which can evidence review if initialed by the representative. Alerts held in this file include Compliance Alerts, Supervisory Alerts, Registration Alerts, and Investment Advisory Alerts. Cancel & Corrects This file should contain copies of Cancel & Correct Forms. Syndicate File (if applicable) This file should contain all required syndicate materials including: prospectus delivery list that shows the name of the offering, to whom the prospectus is being sent and the date that the prospectus is delivered; copy of the indication of interest (Syndicate Freeriding & Withholding Questionnaire) for each indication of interest; a copy of the trade ticket; and a copy of confirmation. All Registered Representatives (RRs) have access to all company documents & forms, including checklists, logs, blotters, order tickets, account applications, and the Written Supervisory Procedures via the SWS Financial website. Page 5 of 18

6 Business Card and Letterhead Guidelines The following pages include sample business cards and letterhead that cover most office scenarios for independent registered representatives. You may design the layout of your stationery, but please keep in mind that the text of the disclosures must be included verbatim on the face of your business cards and letterhead. If you plan to use the SWS Financial Services logo, you must duplicate the image exactly. You can download SWS Financial Services logos at On the left side of the screen, click on General Information, then Logos. There are several color versions of the logo and four different types of files available. Your printing vendor will probably prefer to use an EPS file. Follow the special instructions to download the logo you want to use in the file format requested by your printing vendor. Be sure to provide the following color codes to your printing vendor Blue Pantone 293 R: 0 G: 71 B: 168 Black Pantone Black at 50% Screen R: 46 G: 43 B: 41 Approval Process and Turnaround Time: Because business cards and letterhead are a form of advertising, they must be approved before use. To obtain approval, submit a proof of your stationery to your OSJ Manager using the Advertising/Sales Literature Review Sheet at least 10 days before you plan to place an order. Once you have chosen a business card and/or letterhead: You will need to select a printing vendor. Have the vendor produce actual business card and letterhead proofs. Submit the proofs to your OSJ Manager via fax or along with the completed Advertising/Sales Literature Review (ASLR) Form. The OSJ Manager will notify you in writing of approval or of any necessary changes. Keep a record of the approval and copies of the card and letterhead in your Advertising/Sales Literature file. You may then place an order with your printing vendor. Page 6 of 18

7 Business Card and Letterhead Frequently Asked Questions What fonts should I use on my business cards and letterhead? You may use any font you choose on business cards and letterhead. The examples used Times New Roman 8 point font. Disclosure fonts must be no smaller than 8 point. What titles am I allowed to use? The following titles have been approved for use by registered representatives: Registered Representative Investment Representative Financial Representative Investment Consultant Financial Consultant Investment Professional Financial Advisor Investment Advisor Representative (must have series 65 or 66) Can my staff use SWS Financial Services business cards? If you would like, your staff may also use approved SWS Financial Services stationery. Support staff must use approved titles that accurately represent their respective roles in your office, such as: Registered Sales Assistant (must be FINRA licensed) Registered Assistant (must be FINRA licensed) Administrative Assistant Office Manager Client Services There are several file types of the logo on the website. Which file type do I use? Most printing vendors prefer the.eps file format because it produces the clearest image and is usually the easiest for vendors to work with. Note that you will not be able to open an.eps file, but you can download and it to your printing vendor. Be sure to follow the special downloading instructions on the SWS Financial Services website. Can I change the colors of the SWS Financial Services logo? You may not alter the appearance of the SWS Financial Services logo. You must use only the color and font schemes provided on the SWS Financial Services website. Page 7 of 18

8 Business Card and Letterhead Frequently Asked Questions -Continued Can I use a doing business as name to market financial services? Yes. DBA s must be submitted to your OSJ for approval before use. You will also need to provide evidence that you have filed the DBA with the appropriate local authorities. Can I include an address on my card? If you choose to include an address on your business cards and/or letterhead, you may only use your assigned SWS Financial Services address. Can I have my cell phone number on my business card? You may have a cell phone number on your business cards and letterhead, but the business card must also include the number of your Supervising Office. Do I have to send in a copy of my business cards and letterhead for approval? You must obtain approval for any advertising/sales literature before use, even if you decide to use one of our examples. Stationery is costly, so be sure that you have written approval from your OSJ Manager in your file before placing an order. Can I use a P.O. Box on my business card? Yes, as long as your P.O. Box address is accompanied by a physical address. What are the color codes for the SWS Financial Services logo? Blue Pantone 293 R: 0 G: 71 B: 168 Grey Patone Black CS at a 50% screen R: 46 G: 43 B: 41 Page 8 of 18

9 Sample Business Cards and Letterhead Following are examples of business cards and letterhead that include required broker-dealer and supervision disclosures. The information required for your cards will depend on whether you use a DBA, how your office location is registered and where your supervisor is located. Please note these abbreviations: DBA Doing Business As name OSJ Office of Supervisory Jurisdiction Use example one or two if you conduct business in an OSJ location: Example One Your Name Your Title Your Phone Number Your Fax Number Your Address Your Street Address Your City, State & Zip Example Two Your Logo Your Name Your Title Your Phone Number Your Fax Number Your Address Your Street Address Your City, State & Zip Offering general securities through SWS Financial Services, Inc. Page 9 of 18

10 Sample Business Cards and Letterhead - Continued Use example three or four if you conduct business from an address that is different from your OSJ Manager s address: Example Three Your Name Your Title Your Phone Number Your Fax Number Your Address Your Street Address Your City, State & Zip OSJ Street Address OSJ City, State Zip OSJ Phone Example Four Your DBA Logo Your Name Your Title Your Phone Number Your Fax Number Your Address Your Street Address Your City, State & Zip Offering general securities through SWS Financial Services, Inc. OSJ Address OSJ City, State Zip OSJ Phone Page 10 of 18

11 Sample Business Cards and Letterhead -Continued Use example one or two if you conduct business in an OSJ location: Example One OSJ Street Address OSJ City, State Zip OSJ Phone OSJ/RBO Street Address OSJ/RBO City, State Zip OSJ/RBO Phone Member: NASD/SIPC Page 11 of 18

12 Sample Business Cards and Letterhead - Continued Example Two Your Logo Your Address Your City, State & Zip Your Phone Offering general securities through SWS Financial Services, Inc. Page 12 of 18

13 Sample Business Cards and Letterhead - Continued Use example three or four if you conduct business from an address that is different from your OSJ Manager s office: Example Three Your Address Your City, State & Zip Your Phone OSJ Address OSJ City, State Zip OSJ Phone Page 13 of 18

14 Sample Business Cards and Letterhead - Continued Example Four Your Logo Your Address Your City, State & Zip Your Phone Offering general securities through SWS Financial Services, Inc. OSJ Street Address OSJ City, State Zip OSJ Phone Page 14 of 18

15 Pre-Approved Announcement Letter The following pre-approved announcement letter may be sent to clients announcing your new partnership with SWS Financial Services. Compliance has reviewed this letter and given permission to use if it is printed on compliance-approved letterhead. Once the letter is sent, simply send a copy of the letter and a list of the recipients to your Regional OSJ Manager and keep a copy of the letter and the list of recipients in your files. You can find this letter in Microsoft Word format on the SWS Financial Services website, under the Pre-approved Marketing Materials tab. Page 15 of 18

16 Date <Client First Name> <Client Last Name> <Address 1> <Address 2> <City>, <State> <Zip Code> Dear <Client Name>, As your financial professional, I have always been interested in helping you invest your hard-earned assets with the best companies available. To ensure I can provide you with the best products and services available and the highest service to you as a client, I found it necessary to find another brokerage firm. I am extremely pleased to announce that I have affiliated with a new broker/dealer; SWS Financial Services, a subsidiary of SWS Group. SWS Financial Services has served the needs of individual investors and small businesses since 1986 exclusively through independent financial professionals such as myself. Their mission statement says a lot about who they are and why I chose to partner with them. Our client is our focus. Our only product is service. Our people value excellence, not mediocrity. The research I have done on SWS Financial Services has shown me that I will have access to many products and services that you and I will need to plan your financial future. We will also have access to a support staff that realizes the money they handle every day is the money that will fund your dreams. You already have placed a great deal of confidence in me by allowing me to become familiar with your financial situation. I greatly value your trust in me. I look forward to further strengthening our relationship with the enhanced client services afforded to us by my new alliance with SWS Financial Services. If you have any questions about my new affiliation, please feel free to call me any time at <Rep s Phone Number>. Sincerely, <Rep s Name> <Rep s Title> This letter should be printed on your compliance-approved letterhead. After you send the letter, you should keep a copy of the letter & list of recipients in your files and send a list of recipients and a copy of the letter to your OSJ Manager. Page 16 of 18

17 Voic Greeting & Disclaimer Each Registered Representative should have a voic system, which will provide instructions to the client in the event you are unable to answer the telephone. There are five (5) key points that you will need to address on your voic greeting, which include but are not limited to: 1. Your name. 2. The firm's name (SWS Financial Services), or if applicable, your OSJ-approved DBA name. 3. A script addressing order information/trade instructions, such as: Please do not leave order information or trade instructions on voic , as they cannot be accepted. If you need immediate assistance, please contact Broker-Client Services at Another simple script addressing general business, such as: for all other inquiries, please leave your name and telephone number so I can return your call. 5. Thank the caller for the phone call. Another important component may be a Temporary Greeting, in the event that you will be out of the office for an extended period of time, such as being away for vacation or extended business travel. Page 17 of 18

18 Signature Example One: For Registered Representatives not using a DBA Name, reporting directly to a Regional OSJ Manager Your Name Your Title (see approved Titles on Page 6) Office Phone Number Cell Phone Number (Optional) Fax Number Address Your Physical Street Address Your Physical City, State & Zip Code SWS Financial Services, Inc Elm Street, Suite 3500 Note: If you are a Registered Representative Dallas, Texas Phone: (214) SWSFS Logo (Optional) reporting directly to a Branch OSJ Manager, this address will be your supervising Branch OSJ s address and phone number. Example Two: For Registered Representatives using an OSJ-approved DBA Name, reporting directly to a Regional OSJ Manager Your Name Your Title (see approved Titles on Page 6) Your OSJ-approved DBA name Office Phone Number Cell Phone Number (Optional) Fax Number Address Your Physical Street Address Your Physical City, State & Zip Code Offering general securities through SWS Financial Services, Inc Elm Street, Suite 3500 Note: If you are a Registered Representative Dallas, Texas Phone: (214) Your DBA Logo (Optional) reporting directly to a Branch OSJ Manager, this address will be your supervising Branch OSJ s address and phone number. Page 18 of 18