InnReg’s client, a prominent Brazilian bank, aspired to extend its operations into the broker-dealer sector within the United States.
The goal was straightforward but involved a complex regulatory journey: to initiate their broker-dealer business while adhering to the Financial Industry Regulatory Authority (FINRA) guidelines.
Objective
Guide a prominent Brazilian bank in launching its broker-dealer business in the United States while aiming to establish compliance with FINRA regulations.
Background
The client, looking to expand their operations beyond Brazil, reached out to InnReg to initiate the process of becoming a US broker-dealer. Founded in 2018, this institution has been steadily expanding its banking services from investments, financial advisory, credit operations, etc., and now aspires to diversify its portfolio even further.
The roadmap towards this internationalization encompasses intricate steps, so the client sought help with the regulatory process and the documentation requirements. Simultaneously, the client was in the midst of managing many internal projects, which posed an additional challenge.
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Challenges
The main challenges faced by the client were:
Gathering the exact documentation needed for the US broker-dealer filing process
Understanding the process of transitioning to launching a broker-dealer business
Coordinating with third parties for additional support
Despite its robust business model, the unfamiliarity with these processes required a detailed approach from InnReg to ensure everything was done correctly.
InnReg's Solution
InnReg was hired to provide a clear roadmap to navigate through these challenges:
Regulatory Guidance: InnReg’s experts explained the process, highlighting the steps involved in the FINRA filing.
Documentation Support: InnReg helped with collecting the necessary initial documentation and identified potential third-party vendors for extra support where needed.
Client Results
The partnership with InnReg has allowed the client to build an effective and scalable compliance program that mitigates regulatory risk.
This prominent Brazilian bank’s journey towards establishing its US broker-dealer business is well underway, with a clear plan and expert guidance from InnReg to ensure compliance with US regulatory standards.
Specifically, the client:
Enhanced its BSA/AML/OFAC compliance program to better mitigate key compliance risks associated with its business model.
Established the necessary governance and process to file an application with FINRA.
Gathered the necessary documentation required by regulators.
Implemented and maintained the system of internal controls (i.e., complaint management, suspicious activity, and transaction monitoring).
