A bank is considering canceling its agreement with a broker to which it currently leases space in its lobby. The new plan would include an agreement with a different broker, but bank employees would complete product sales. What should the compliance manager do FIRST?
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A. B. C. D.D
The compliance manager's first step in this situation should be to determine the additional compliance risk for the bank as a result of the proposed change. This will help the bank understand the regulatory implications and potential risks associated with the new arrangement.
Option A, establishing a licensing program for bank employees, and Option B, establishing a training plan for employees who will be selling non-deposit investment products, are both important steps that should be taken. However, they should be taken after the compliance manager has determined the additional compliance risk.
Option C, obtaining copies of SEC and NASD rules regarding nondeposit investment products, is also important, but it should be done in conjunction with determining the additional compliance risk. The compliance manager needs to review the regulations to ensure that the bank is following all of the relevant rules.
Therefore, Option D is the correct answer. The compliance manager should conduct a thorough review of the regulatory environment and the bank's existing compliance policies and procedures to identify any potential compliance risks associated with the change in the bank's business model. This will help the bank to develop an effective compliance program that meets regulatory requirements and mitigates any risks that may arise. Once the additional compliance risks have been identified, the compliance manager can then move on to establishing a licensing program for employees, training employees, and reviewing relevant regulations to ensure compliance with the new arrangement.