Broker Dealer Services US Broker Dealer Services 1

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1 Broker Dealer Services US Broker Dealer Services 1

2 September 2013 Our Broker Dealer Services We are delighted to present details of our broker dealer services, covering registration. Please do not hesitate to contact us for further information. In the meantime may we again thank you for this opportunity to present our firm s distinctive value adding services. Yours sincerely Julian Korek CEO E: [email protected] T: M: US Broker Dealer Services 2

3 The issues facing Broker-Dealers Broker-Dealers face a myriad of FINRA and SEC rules and regulations in today s business environment. A firm s compliance program is critical in setting the tone for the success of the firm s operations and to solidify its business reputation. It is therefore imperative that Broker-Dealers have a comprehensive and well tested compliance program. Broker-Dealers face ongoing challenges including, but not limited to: increased client due diligence; legal, reputational, and monetary consequences to which firms can be exposed due to an inadequate compliance infrastructure; limited resources when dealing with the growing complexity and reach of FINRA and SEC rules and regulations; and growing scrutiny from the SEC and FINRA during regulatory examinations. US Broker Dealer Services 3

4 Why choose Kinetic Partners? Kinetic Partners can assist you in mitigating compliance risk by leveraging our proven methodologies and to bolster your firm s compliance infrastructure as this new wave of regulation affects the financial services industry. In April 2013, during his remarks at The 2013 National Compliance Outreach Program for Broker-Dealers, Daniel Gallagher, a Commissioner with the U.S. Securities and Exchange Commission, had this to say about new regulation:. and then there is the overwhelming volume and pace of new and anticipated regulations in response to the financial crisis. New rules proposed or implemented by the SEC, CFTC, and other agencies pursuant to the Dodd-Frank Act have already tremendously increased burdens on compliance departments throughout the securities industry. For example, last year, the House Financial Services Committee estimated that it will take 24 million man hours every year in order for the private sector to comply with Dodd-Frank rules. In addition to Dodd-Frank, other new rules issued by the SEC and the SROs have added to the already heavy compliance burden at broker-dealer firms.. US Broker Dealer Services 4

5 How we can help you Our experienced team of specialists can work with you to help you understand the initial registration requirements and complete your registration with the SEC, FINRA, and/or the appropriate state regulatory body. For those current FINRA members, Kinetic can assist with ongoing regulatory requirements and filings to ensure adequate compliance with the ever-changing regulatory environment. Our Broker-Dealer compliance specialists comprise former SEC and FINRA regulatory professionals and lawyers, and compliance professionals from prestigious global broker dealer firms. Our team works with US and international Broker-Dealers, to assist them in meeting regulatory obligations while reducing their compliance risk profile. Registrations services Draft and file all applicable registration forms and filings (for SEC and FINRA or state regulatory body) Prepare clients for Membership Interview(s) Schedule qualification examinations for applicable candidates Develop and implement Supervisory Procedures Manuals, including but not limited to Anti-Money Laundering ( AML ) Perform Continuing Education needs analysis and create training plan Develop a Business Continuity Plan US Broker Dealer Services 5

6 How we can help you Ongoing regulatory support Conduct SEC / FINRA mock examinations Assist with any correspondence received from the SEC, FINRA, or state regulatory body Inform the Broker-Dealer of changes in SEC and FINRA rules and regulations that may affect the Broker-Dealer s business Internal control reviews Conduct AML audits and testing Assist with resourcing requirements Update the Broker-Dealer s Supervisory Procedures Manual(s) as needed Conduct the Broker-Dealer s annual compliance meeting Review of advertising and marketing materials, including s Spearhead the annual registration renewal process Prepare and file any CRD amendments or updates Submit Form BR filings and conduct audits as directed Ad hoc Projects / Services Analysis of business to determine the areas most likely to be examined by the SEC and/or FINRA Provide ad-hoc regulatory advice as needed Take on ad-hoc projects Customize services US Broker Dealer Services 6

7 Meet our team t: e: chris.lombard Chris Lombardy Member, Consulting Regulatory Compliance Expertise - Regulatory Compliance Chris has over 13 years of experience working within the financial services industry in various roles including lawyer, chief compliance officer and consultant. He has worked closely with a number of asset managers in all phases of their business including, formation and structuring, establishing compliance and operations infrastructures, selecting appropriate service providers, identifying and addressing risks and conflicts, performing operational due diligence reviews and preparing for and dealing with regulatory examinations. Chris graduated with a Juris Doctor, from the St. Thomas University School of Law and holds a Bachelors of Science in International Finance and a Masters of Business Administration in Finance from American University Kogod School of Business. US Broker Dealer Services 7

8 Meet our team t: e: Donald Babbitt Director, Consulting Regulatory Compliance Expertise Regulatory Compliance Don is a Director in Kinetic Partners global regulatory practice and is based in New York. Prior to joining Kinetic Partners, Don s regulatory compliance experience included working as the in-house chief compliance officer and FINOP for a registered introducing broker-dealer and as a staff attorney for the SEC s Divisions of Investment Management and Corporation Finance. Since joining Kinetic Partners in 2011, Don has assumed responsibility for managing numerous client accounts and has also been involved in public speaking engagements on behalf of Kinetic Partners. Don graduated with a Juris Doctor, summa cum laude, from the University of Dayton School of Law and holds a Masters of Business Administration in Finance from Columbia Business School. US Broker Dealer Services 8

9 Meet our team t: e: neticpartners.com Scott Kelly Associate Director, Consulting Regulatory compliance Expertise Regulatory Compliance Scott is an Associate Director with Kinetic Partners in their New York office. Prior to joining Kinetic, Scott was a Principal Examiner with FINRA. In this role, Scott led financial and operational examinations of member firms which included (i) managing information requests (ii) leading FINRA staff (iii) conducting interviews with senior management and (iv) running examination close-out meetings. Earlier in his career at FINRA, Scott was involved with the registration and on boarding process and then he handled the implementation and examination process of member firms on the American Stock Exchange. A highly experienced regulatory compliance professional, Scott has held regulatory reporting positions with Merrill Lynch, Peirce, Fenner, and Smith; Pershing; Paine Webber (now part of UBS); and Salomon Brothers (now part of Citigroup). At Kinetic, Scott assisted in a project that is to establish a clear US institutional compliance infrastructure for a global broker-dealer across its many US entities. Scott holds a Master of Science in Accounting from Wagner College and a Bachelor of Business Administration in Finance from Pace University. US Broker Dealer Services 9

10 Meet our team t: e: Carlos Alvarez Associate, Consulting Regulatory compliance Expertise Regulatory Compliance Carlos is an Associate who joins us from a reputable asset management firm. While at the asset manager, Carlos was responsible for various FINRA and NFA filings. Additionally, he was a part of the team that initially registered the asset manager s broker-dealer affiliate with the SEC/FINRA. Carlos also led projects and compliance initiatives for the asset manager, which included creating of an annual training program and creating various policies and procedures. At Kinetic, Carlos has helped clients gather and submit all required information to the SEC/FINRA for their broker-dealer registration. He has also helped clients with their ongoing compliance responsibilities and provided clients with ad-hoc regulatory support as needed. Carlos holds a Bachelor of Science from Syracuse University and has previously been registered with FINRA as a general securities representative and general securities principal. US Broker Dealer Services 10

11 About us Kinetic Partners is an award winning global professional services firm focused on the financial services industry. Launched in 2005, we now have over 170 staff in eight locations, servicing over 1,300 clients. Kinetic s global locations include London, Dublin, Grand Cayman, New York, Luxembourg, Geneva, Hong Kong, and the Channel Islands. With a passion for financial services, strong understanding of the global regulatory environment and connected teams across our locations, we are established as a viable alternative to the Big Four. Kinetic Partners offers audit and assurance, tax, consulting, compliance, forensic, corporate recovery, corporate finance, and risk & valuation services. Benefitting you and your business Our business model enables clients to experience an unparalleled level of expertise, talent and industry knowledge. We are focused and passionate about the industry. We are connected both as a global team, but also to key regulators, industry bodies and business leaders. We have exceptional depth of regulatory and industry experience amongst our team. Our philosophy All of our staff grow with Kinetic Partners to focus on how we support clients to drive their businesses forward, whilst responding to key industry requirements. We recruit and develop leading industry expertise, and collaborate across functional or geographic boundaries. This way we deliver cost effective solutions and are immersed in the issues which affect our clients. US Broker Dealer Services 11

12 Where we operate With teams in key financial services locations, we are able to expert provide advice wherever you or your clients doing business. US Broker Dealer Services 12

13 Other Kinetic Services Other work we have undertaken for the financial services industry. Compliance Projects Kinetic recently completed a project for a global Broker-Dealer, whereby we assisted in establishing a clear US institutional compliance infrastructure across its many US entities. Operations Due Diligence We help investors in alternatives (fund of funds, family/multi-family offices, sovereign wealth funds, pension funds, wealth managers, banks, endowments & institutions) by reviewing hedge funds, CTAs, private equity funds, long only funds, UCITS funds, fund of hedge funds and manager service providers. Operational Controls We review operational manuals and test all aspects of Operations Controls. We evaluate and test cash movements / segregated funds. We perform reconciliations of trades, positions and cash. We recommend quality service providers. Other Services Provided We execute a detailed test and analyze the effectiveness and efficiency of the firm s Anti-Money Laundering program. We conduct an annual review of the Broker-Dealers business operations and compliance to ensure conformity with FINRA and SEC rules and regulations. We perform testing of certain compliance procedures identified by a risk analysis to alleviate regulatory exposure. We regularly hold breakfast meetings where we keep current and prospective clients abreast of the dynamic regulatory and compliance landscape. US Broker Dealer Services 13

14 Contact us London One London Wall Floor 10 London EC2Y 5HB United Kingdom t: Dublin Iveagh Court Floor 5 Block D Harcourt Road Dublin 2 Ireland t: New York 675 Third Avenue Floor 21 New York NY United States t: Grand Cayman The Harbour Centre 42 North Church St Grand Cayman KY Cayman Islands t: Geneva 30 Quai Gustave-Ador Genève CH-1207 Switzerland t: Luxembourg 65 rue d Eich L-1461 Luxembourg t: Hong Kong Unit 4103, 41/F Tower Two, Lippo Centre 89 Queensway Hong Kong t: Channel Islands 13 Broad Street St Helier Jersey JE2 3RR Channel Islands t: US Broker Dealer Services 14

15 Disclaimer: This publication is for informational purposes only, and none of Kinetic Partners or its related entities (collectively Kinetic Partners ) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity within Kinetic Partners shall be responsible for any loss whatsoever sustained by any person who relies on this publication. US Broker Dealer Services 15