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SEC Hits Wisconsin BD With Reg BI High-quality


These written insurance policies and procedures “didn’t adequately deal with Hennig’s Battle of Curiosity Obligation as a result of, amongst different issues, they didn’t present any steerage or procedures for a way the agency was to realize these objectives,” the SEC mentioned.

In January 2021, after an examination by the Monetary Trade Regulatory Authority, FINRA requested that Hennig take motion to replace and proper its written insurance policies and procedures associated to Reg BI.

When the SEC’s Division of Examinations examined Hennig in June 2021, “Hennig had not but taken motion ample to carry its written insurance policies and procedures” into compliance with Reg BI, the order states.

In consequence, in Might 2022, the SEC issued a deficiency letter to Hennig noting that Hennig’s written insurance policies and procedures nonetheless didn’t adjust to Reg BI.

In January 2023, Hennig adopted new written insurance policies and procedures associated to Reg BI, together with written insurance policies and procedures associated to its battle of curiosity obligation, disclosure obligation, and care bligation.

Type CRS Failures

From their adoption in June 2020 by means of January 2023, Hennig’s written insurance policies and procedures associated to its Disclosure Obligation said that Hennig’s Type CRS would “deal with all obtainable providers Hennig presents by means of its brokerage accounts and advisory platforms and the charges related to each.”

The order states that Hennig additional disclosed in its Type CRS that the “major charges” paid by the shoppers for brokerage providers are “transaction-based charges … sometimes known as commissions, gross sales expenses, hundreds, promoting concessions, or trails.”

Nevertheless, “Hennig’s written insurance policies and procedures weren’t fairly designed to offer further info past that mentioned in its Type CRS to its prospects,” the SEC mentioned.

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