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Compliance-process automation software like the STAR Platform can help your firm monitor and manage outside business activity with simplicity and ease. Steve Brown, veteran compliance officer and Head of Business Development at Star, tells you how
Whether it’s employees serving on other business boards or engaging with family and friends who work at competing firms, compliance teams need to know about their employees’ interests and activities outside the firm. Even if these interests don’t influence employees’ work, and even if the activity is completely honest and ethical, stringent regulation means firms must flag potential conflicts of interest to avoid even the appearance of impropriety. Anything else could lead to regulatory action and to damaged reputations for firms, compliance officers, and employees. Fortunately, FINRA’s guidelines regarding outside business activities are fairly clear-cut: “No registered person may be an employee, independent contractor, sole proprietor, officer, director, or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm.”
FINRA dictates that employees provide written notice to the firm of any intent to conduct outside business activity. Then, the firm must determine whether the activity would compromise the employee’s responsibilities regarding the firm and its clients. FINRA’s outside business activity regulations also dictate that firms track and preserve all activity-related records. Of course, this is a lot for compliance teams to oversee, especially for those who still rely on manual or semi-manual monitoring processes. Fortunately, advances in software and automation over the past decade makes the monitoring of outside business activity easier than ever.
MONITORING AND MANAGING OBA WITH STAR
Guiding a firm away from regulatory trouble and safeguarding its reputation is a tall task for compliance officers, but Star software can make it easier in the following ways:
1. EASY DECLARATIONS
With many fully configurable forms and features, our regulatory compliance software makes it easier for employees to declare outside business interests. They can report from anywhere at any time with the STAR Platform. The STAR Platform dashboard also makes it easier for compliance teams to surface potential conflicts of interest by documenting charitable donations and activities regarding connected individuals, such as family members and friends, who work for outside firms. Compliance officers can apply filters, run queries, and pull reports to keep everyone in the know and reduce the chance of regulatory infractions.
2. PRE-CLEARANCE CAPABILITIES
Star software can also integrate data from other internal business systems—such as order management and human resources—to help compliance teams make quicker, better-informed decisions regarding each outside business activity declaration submitted. Compliance officers configure the software using this decision-making data, preferred wording, and specific questions to set up pre-clearance or clear requests in real time with ease.
3. SIMPLER CERTIFICATIONS AND ATTESTATIONS
Along with simplifying the declaration-clearance processes, our regulatory compliance software also allows compliance to more easily sort and assemble employee data into certifications and attestations. Teams can then distribute them companywide for completion. All of this activity is tidily tracked and dutifully recorded by the STAR Platform. If FINRA ever does come knocking at your door, these highly accessible and auditable records can serve as proof your firm is doing everything in its power to monitor and manage outside business activity.
If you’re looking for a clearer picture of outside business activity, look no further than the STAR Platform. It’s user-friendly—with drag-and-drop fields, prebuilt and configurable reports, and easily accessible dashboard analytics—and is invaluable in helping you visualize outside business activity from a 360-degree perspective.
