Tag Archive for: FinOp

ACI’s Jay Gettenberg to Appear on Dec 8 FAE Broker Dealer Tech Session Teleconference

ACI Managing Partner, Jay Gettenberg, will join a teleconference of accounting professionals on December 8th to discuss regulatory issues and considerations the industry faces as the country heads into 2021.

The 90-minute panel, sponsored by the Foundation for Accounting Education, will be geared toward providing broker dealer FINOPS and auditors with the latest information available. Topics may include the impact of the pandemic on industry practices as well as the latest news from the SEC, FINRA and the PCAOB.

The panel will be part of the foundation’s afternoon teleconference, which runs from 1 p.m. to 4:30 p.m. on December 8th. The session is aimed at industry professionals at the Intermediate/Advanced Level. Attendees can receive 1.5 Auditing (NYSED) credits, 1 Specialized Knowledge/Industries (NYSED) credit and 0.5 Auditing (NYSED) credits. For more details and to register, click here: https://cpe.nysscpa.org/product/32215

Gettenberg, a member of the FINRA Small Firm Advisory Committee (SFAC), has participated in previous FAE panels, including one in July on “Accounting and Auditing in COVID Times.”

ACI will continue to provide updates on our Resources page as we manage together through this challenging time. We hope everyone is taking proactive and precautionary measures to remain safe.  

ACI’s Managing Partner, Jay Gettenberg, Will Be a Citrin Cooperman FINOP Roundtable Panelist

ACI Managing Partner, Jay Gettenberg, will participate in a November 12 virtual roundtable discussion on important issues FINOPs may face in the upcoming audit season.

The roundtable, sponsored by Citrin Cooperman, will bring together six industry veterans to provide insights and advice on a variety of topics, including the impact of the COVID pandemic on internal control changes, fixed asset and other impairments, and related issues.

Gettenberg, a member of FINRA’s Small Firm Advisory Committee (SFAC), will focus his remarks on amending membership agreements for the new guidance issued by the SEC and FINRA, PPP loan forgiveness treatment ASC 470 vs. IAS-20, and going concern evaluations under COVID-19.

The panelists will also discuss other topics such as:

  • Internal control changes resulting from COVID-19 and work from home
  • Fixed asset, goodwill, and intangible impairments as a result of COVID-19
  • Subsequent event considerations
  • Lease concessions and ASC 842

Citrin Cooperman partner John Cavallone, CPA, will moderate the discussion.

The roundtable will be 4:30 p.m. to 6 p.m. Eastern Time on November 12. Registration is free and 1.5 CPE credits will be offered.

For more information or to register click here.

ACI will continue to provide updates on our Resources page as we manage together through this challenging time. We hope everyone is taking proactive and precautionary measures to remain safe.

New FAQ Clarifies FINOP Site Visit Requirements

FINRA just clarified a question that has been a thorn in the side for many outsourced FINOPs and their broker-dealer clients for many years: Are FINOPs required to make on-site inspections of their clients’ records to fulfill their regulatory duties? The short answer: No.

FINRA examiners had been using a 2006 Notice to Members to effectively attempt to obligate FINOPS to go onsite on a periodic basis.  While this Notice to Members was not technically a rule, FINRA seemed to insist that FINOPS needed to be physically onsite to oversee the regulatory activities of the firms at which they were registered, irrespective of the securities activities or risk profile of the member firm. Examinations occasionally have even tried to cite firms if the FINOP could not demonstrate an annual onsite visit.   

In reality, many outsourced FINOPS service small, limited purpose broker-dealers, who do not hold customer funds nor pose any inherent risk to the investing public.  Access to the books and records, bank statements and vendor invoices, and supplementing FINOP reviews with financial statement approvals by internal, full-time, supervisory principals, generally has been sufficient to ensure controls are in place and accurate reporting is not compromised.

In a new FAQ, FINRA has made clear that FINOPs is not required to conduct an on-site visit “if the FINOP can fulfil his or her obligations through other means.”

Advocating for FINOPs and their clients

ACI Managing Partner, Jay Gettenberg, as a member of FINRA’s Small Firm Advisory Committee (SFAC) has long been an advocate for FINRA to make clear that on-site inspections were not necessary. The travel restrictions due to COVID-19 added urgency to the need for FINRA to act.
“The fact is, over the last six months FINOPs have done their jobs remotely, without the industry crumbling,” Gettenberg said. “It’s important that FINRA recognize this and amend their guidance to mirror the new reality. If FINRA and SEC claim that they can continue cycle examinations remotely, then the argument should hold true for FINOPs being able to perform their supervisory responsibilities in the same manner.”

The new guidance provides relief to FINOPS to make risk-based assessments into how to perform their duties most effectively, Gettenberg said. He plans to continue to advocate for changes that will help FINOPs and their clients fulfill their compliance duties as the economy emerges from the lockdown.

Answering the On-Site Inspections FAQ

Here is the full wording of the FAQ:

I am registered as a Financial and Operations Principal (FINOP) for several firms and conduct my work off-site. Do I need to conduct an on-site inspection of the firms’ books and records as part of fulfilling my FINOP obligations? 

All FINOPs, regardless of whether they work part-time, work off site or hold multiple registrations are responsible for fulfilling the duties outlined in FINRA Rule 1220(a)(4)(A). FINRA has previously provided guidance to member firms to help them assist their FINOPs in fulfilling the obligations specified in Rule 1220(a)(4)(A). See Notice to Members 06-23 (May 2006). The guidance, which includes a provision regarding on-site visits, should not be viewed as requirements (i.e., a FINOP is not required to conduct an on-site visit if the FINOP can fulfill his or her obligations through other means). A member firm’s written supervisory procedures, however, may impose additional requirements for FINOPs, such as an on-site visit to review a location’s books and records. In addition, nothing in this guidance relieves a firm from the obligation to conduct periodic office inspections in accordance with the requirements of Rule 3110(c).

ACI will provide updates on our Resources page as we continue to work with the SEC and FINRA on matters that affect FINOPS and our clients.

FINRA, Broker Dealers & Advisory Accounts