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Knowing the regulatory environment is crucial for anyone involved in wealth management. In this lesson, well explore how HTK, as a brokerdealer and Registered Investment Adviser RIA, interacts with regulatory bodies and provides assurance that HTK complies with industry standards. Regulatory Oversight HTK is subject to oversight by several regulatory bodies, including the Securities and Exchange Commission SEC, the Financial Industry Regulatory Authority FINRA, and state securities authorities. HTK regularly engages with these regulators through routine filings, inquiries, and examinations. This engagement provides assurance that HTK complies with the laws and regulations that protect consumers financial interests. Product Sales Reviews Regulators often review product sales to confirm that any replacements of these products meet the insurance needs and financial objectives of the consumer. State insurance regulators have laws addressing suitable transactions, such as NY Reg 60, NY Reg 187, and NAIC Best Interest standard of care, and more. Any recommendation to replace an existing variable life insurance policy or annuity contract must clearly benefit the client. This benefit must be thoroughly documented in the required purchase paperwork. Breaking News SEC Regulatory Priorities In October 2023, the SEC released its 2024 Regulatory Priorities, highlighting areas of focus for routine and targeted examinations a.k.a. sweep exams of RIAs, like HTK. Priorities for these examinations include Compliance Programs Assessing whether firms have effective compliance programs in place Investment Advice and Conflicts of Interest Providing unbiased advice and disclosing any conflicts of interest Fiduciary Duty Upholding fiduciary responsibilities to clients Fees and Expenses Addressing risks related to fees and expenses Custody and Disclosures Proper handling of client assets and transparent investor disclosures Information Security Protecting against cybersecurity threats to assure operational resilience Crypto Assets and Technology Managing risks associated with crypto assets and emerging financial technologies FINRA Examination Focus In 2023, FINRA published a report of examinations and oversight outlining key focus areas for the FINRA examination program. HTK aligns its policies, procedures, and annual education programs with these priorities, as deemed necessary, including Outside Business Activities OBAs and Private Securities Transactions Monitoring and reporting external activities that might conflict with HTKs operations Communication with the Public Assessing whether public communications are clear and compliant Regulation Best Interest Reg BI Prioritizing clients best interests in all recommendations Variable Annuities Properly assessing the suitability of variable annuities for clients Crypto Assets Understanding and mitigating risks associated with crypto assets Cybersecurity Protecting client information and maintaining data security HTK actively monitors regulatory developments and proposed regulations to assure compliance and prevent disruptions in client services. By staying ahead of changes, HTK can continue to provide uninterrupted service and maintain trust with clients.