An enterprising firm had begun contemplating whether they should form a broker/dealer. They had been working with corporations and various institutions in providing strategic consulting advice on strategic partnerships, mergers and acquisitions, capital raises, and corporate restructurings. The firm wanted to enhance their business by offering private placements and have the opportunity to receive commissions from capital raises. However, they did not know the process, requirements, and economics of establishing and maintaining a broker/dealer.
Our Process and Methodology
FIC initially communicated with the firm learning more about their existing business, strategic vision, and why they were potentially interested in forming a broker/dealer. We also gave an overview of the process of establishing a broker/dealer, key considerations in establishing a broker/dealer, and normal types of expenses in starting and running a broker/dealer. FIC then provided a customized report providing detailed information on projected costs, specific considerations and obstacles, and more on how FIC could assist them going forward.
Once the firm decided to move forward to establish a broker/dealer, we proceeded to develop an action plan that provided various responsibilities and completion dates. The action plan provided a method by which FIC and the firm could measure progress. It also formed the basis of a systematic process to navigate the requirements of forming a broker/dealer. We also agreed to have weekly meetings to provide further guidance and status updates on the process.
FIC went to work on creating various documents and processes customized to the firm. FIC also communicated further the items the firm would have to undertake or provide, such as incorporation documents, funding for registration, etc. Routinely, FIC and the firm uploaded documents to a cloud based storage system in addition to sharing documents by way of email. Throughout the process, FIC provided valuable insight to not only create the broker/dealer but also shared knowledge on aspects that could enhance the firm or save the firm money in the future.
One month from the date the action plan was generated, FIC then submitted to FINRA a New Member Application with accompanying documents requesting broker/dealer registration for the firm. Thereafter, FIC maintained frequent communications with FINRA in responding to their requests and inquiries while further assisting the firm on various matters related to the registration request.
The enterprising firm was approved as a broker/dealer with FINRA, the SEC, and applicable states approximately four months after the filing of the New Member Application. The firm was provided the tools and guidance necessary to conduct operations and activities in a compliant manner after FINRA approval.
How Can FIC Help?
FIC specializes in the establishment of broker/dealers. We have designed a highly-organized, systematic process to serve as the “quarterback” in your firm’s desire to seek approval as a broker/dealer.
- Handle all communications promptly with FINRA as part of the broker/dealer approval process.
- Communicate steps and actions that your firm will need to take and those efforts to be undertaken by FIC.
- Provide regular updates as to the status of the broker/dealer approval process.
- Develop all policies and procedures in concert with any instructions and guidance provided by your firm.
- Provide forms and instructions on compliance and operational matters plus other books and records.
- Provide guidance on best practices and offer solutions to issues.
For those firms unsure as to establishing a broker/dealer, we can provide consultations that will help you make an informed decision