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Industry Challenge

Also known as ‘pay-to-play”, SEC and MSRB rules prohibit firms from providing advisory services for compensation to a government client for a period of two years after the representative makes a contribution to certain elected officials or candidates, excluding pre-defined limitations.

To avoid non-compliance and related penalties, firms must implement compliance policies and track and record contributions by advisers or broker-dealers, as well as the engagements of third parties that solicit government entities. The rules require financial services professionals to curate a list of all government entities where investment advice was provided during the past five years and to maintain a record of all contributions to government officials and political action committees.

RegEd Solution

Political Contributions DiagramPolitical Contributions is part of RegEd’s Conflicts of Interest Solution Suite, which comprises five modules that can be implemented individually or together. By automating the management of political contributions, firms can have confidence they are embedding best practices in their compliance program.

Political Contributions enables broker-dealers and registered representatives to easily establish compliance in an efficient and cost-effective manner by highlighting violations and streamlining submissions.

Distinguishing Capabilities

  • Enables firms to comply with applicable federal, state and local rules on contributions.
  • Provides compliance stakeholders with the information needed to accurately complete and file the required political contribution forms with the appropriate regulators.
  • Reduces non-compliance risk related to rules that ban firms from doing business with a municipal issuer.