upcoming regulatory changes thursday, november …...upcoming regulatory changes thursday, november...

© 2018 Financial Industry Regulatory Authority, Inc. All rights reserved. 1

Upcoming Regulatory Changes Thursday, November 8 3:00 p.m. – 4:00 p.m.

During this session, panelists preview and discuss upcoming rule changes, proposals and other regulatory initiatives.

Moderator: Meredith Cordisco Associate General Counsel FINRA Office of General Counsel Panelists: Donald Lopezi Senior Vice President and Regional Director, Sales Practice FINRA West Region Paige Pierce Management Consultant Larimer Capital Corporation Kelly Shoop Special Counsel, Office of Sales Practice, Division of Trading and Markets U.S. Securities and Exchange Commission (SEC)


Upcoming Regulatory Changes Panelist Bios: Moderator: Meredith Cordisco is Associate General Counsel with FINRA’s Office of General Counsel. In this capacity, she provides legal guidance on policy initiatives, rule changes and interpretations in various areas, including regarding new issues and spinning, private securities transactions and outside business activities. Before joining FINRA, Ms. Cordisco was counsel in the Securities Litigation and Enforcement group at WilmerHale, where she focused her practice on complex securities enforcement investigations. Ms. Cordisco received her B.S., summa cum laude, in International Business and French from Mount St. Mary’s University in Emmitsburg, Maryland, and her J.D., summa cum laude, and M.B.A., cum laude, from Villanova University. Following her studies, Ms. Cordisco clerked for the Honorable Eduardo C. Robreno on the U.S. District Court for the Eastern District of Pennsylvania. Panelists: Don Lopezi is Senior Vice President and Regional Director of FINRA’s West Region. The West Region consists of the District Offices located in Denver, Los Angeles and San Francisco. The West Region is responsible for conducting examinations, investigations and ongoing surveillance of broker-dealers and registered persons located in the western half of the United States. Previously, Mr. Lopezi was the District Director of the FINRA San Francisco District Office. Prior to joining the San Francisco Office, he was a Director of FINRA’s Examination Programs Group (EPG), located in Washington, DC. EPG, among other things, authored and maintained examination policies and procedures used by FINRA’s examination staff, coordinated national special projects and initiatives, and oversaw the national examination program—the regulated firm-focused examination and surveillance activities conducted by FINRA’s Member Regulation Department. Mr. Lopezi began his career as an Examiner in NASD’s Denver District Office in 1992 and after serving as Supervisor in the Denver District Office, joined the Washington, DC office in September 2003. He graduated from the University of Colorado at Boulder with a B.S. degree in Accounting, and received his MBA from the University of Colorado at Denver. Paige W. Pierce is a leader of leaders who has made a difference across industries by helping influencers focus first on their employees, fall in love with their customers, and see their landscape in ways no one else can. She’s played principal roles in multiple startups, guiding a number of them to profitable exits, and realized equal success turning around underperforming organizations and helping growing concerns figure out “What’s next?” As president of PSP consulting (2017 to present), Ms. Pierce has helped businesses based in the UK and Australia overcome obstacles with their US operations and assisted US-based clients in navigating regulatory and compliance challenges. Her clients’ industries have spanned financial services (where she is a subject matter expert), manufacturing, and tourism. Nowhere is Ms. Pierce’s ability to navigate changing markets more apparent than with her tenure at RW Smith & Associates, a Fixed Income Interdealer Broker (IDB). A Founding Principal of the firm, she returned to the family-owned business as a consultant in 2001, positively resolving a critical regulatory issue and revamping compliance in the wake of the 2001 recession and the regulatory repercussions of the Arthur Andersen scandal. As President & CEO of RW Smith (2005 to 2017), and in previous leadership roles (2001 to 2004), Ms. Pierce responded to downward margin pressures and unfavorable regulatory environments by leading the evolution of both the firm’s business model and the regulators’ view of IDBs and small firms. Internally, she resolved market and cash flow challenges by twice negotiating the sale of the firm, once to a venture capitalist and later in parts to complementary businesses. She also revamped product offerings to increase top-line sales 600%. On the regulatory and legislative front, Ms. Pierce spent the better part of 20 years advocating on behalf of IDBs and small firms with purpose and passion, working to advance regulatory and legislative understanding of these important segments of financial services and the challenges they face. As an advocate for small businesses, Ms. Pierce has been invited to the Federal Reserve, offices of Congressional representatives, the Securities and Exchange Commission, and important policy discussions. She was the first IDB representative in many FINRA groups, including the National Adjudicatory Council, Fixed Income Committee, and Small Firm Advisory Board, the latter as elected Chair in 2017. Ms. Pierce also organized previously siloed firms, contributing actively to professional organizations and co-founding the BMA/SIFMA Municipal Securities Broker’s Broker Committee, the Municipal Bond Information Service Company, and the Bond Dealers of America Small Firm Division. Ms. Pierce was the CFO, Operating Officer, and a Founding Principal of Agincourt, Ltd. (1994 to 2000), a Bermuda-based broker/dealer focused on creating structured products for the fixed income institutional market. She spearheaded the creation of strategy,


financial controls, and systems overseeing Bermuda-, UK-, and US-based activities for this Bermuda-based broker/dealer, ultimately engineering a successful exit. An early career in banking and finance formed the foundation of Ms. Pierce’s lead-from-the-front style. Her approach led to repeated promotions and upward recruitment. Representative accomplishments include the recapture of millions of dollars for two of LaSalle Bank’s operating units, the transformation of one of their cost centers into a profit center, and success in PaineWebber’s fast-paced, high-stakes Municipal Trading Division. Passionate about professional development for herself, her colleagues, and her team, Ms. Pierce is a longtime member and leader within the Young President’s Organization. She is currently Co-Chair of the London Business School YPO Executive Education Presidents’ Program. A graduate herself, as Co-Chair she took the lead in redesigning the intensive 5-year course to incorporate themes of innovation, strategy in uncertain times, organic vs architected growth, “futurist” visioneering and managing across the generations (and borders). Ms. Pierce is an Honorary Commander and Falcon with the 388th FW out of Hill Air Force Base in Utah, supporting the airmen/women who serve our great country. Kelly S. Shoop is Special Counsel for Sales Practices in the Division of Trading and Markets at the U.S. Securities and Exchange Commission. The Office of Sales Practices has program responsibility for a broad range of broker-dealer sales practice issues, including broker-dealer supervision and suitability sales practice issues. Prior to joining the Commission, Ms. Shoop was counsel in the securities litigation and enforcement group at a major international law firm. She earned her law degree from Washington University in St. Louis and her undergraduate degree from DePauw University.

2018 Small Firm Conference

November 7-8, 2018 | Santa Monica, CA

Upcoming Regulatory Changes

2018 FINRA Small Firm Conference | © 2018 FINRA. All rights reserved. 1

Panelists

Moderator

Meredith Cordisco, Associate General Counsel, FINRA Office of

General Counsel

Panelists

Donald Lopezi, Senior Vice President and Regional Director, Sales

Practice, FINRA West Region

Paige Pierce, Management Consultant, Larimer Capital Corporation

Kelly Shoop, Special Counsel, Office of Sales Practice, Division of

Trading and Markets, U.S. Securities and Exchange Commission (SEC)

2018 FINRA Small Firm Conference | © 2018 FINRA. All rights reserved.

Regulatory Updates

FINRA

SEC

PCAOB

Impact on Small Firms

Exam Priorities and Enforcement Highlights

SEC

FINRA

2

Agenda


FINRA360 Initiative

Status of Current Proposals and Rulemaking Initiatives

– Remote Office Inspections

–Gifts, Gratuities and Non-Cash Compensation

– High-Risk Brokers

– Outside Business Activities and Private Securities Transactions

– Early-Stage Retrospective Review Items (Carrying Agreements; Annual

Compliance Meeting)

3

FINRA Regulatory Updates


Regulation Best Interest

FAIR Act

AML

4

SEC Regulatory Updates


Overview

Small Business Audit Correction Act of 2018

5

PCAOB Audit


SEC

FINRA

6

Exam Priorities and Enforcement Update

Materials provide by Paige Pierce

Larimer Capital Corporation

June22,2018TheHonorableMikeCrapo TheHonorableSherrodBrownChairman RankingMemberComm.onBanking,Housing,andUrbanAffairs Comm.onBanking,Housing,andUrbanAffairsUnitedStatesSenate UnitedStatesSenateWashington,DC20510 Washington,DC20510DearChairmanCrapoandRankingMemberBrown:Theundersignedpeople,ataminimumandrepresentingsmallbusinesses in49of50states (therearenosmallbrokeragefirmsheadquarteredinWyoming…YET),stronglyurgeCongresstopassbipartisanlegislation,TheSmallBusinessAuditCorrectionActof2018(S3004),co-sponsoredbySenatorsTomCotton(R-AR)andDougJones(D-AL),whichwouldrequestaspecificexemptionforsmall,privatelyheld,non-custodialbrokersand dealers in good standing from Title One of Sarbanes-Oxley requirement to hire a Public CompanyAccountingOversightBoard(PCAOB)-registeredauditfirm.Thelegislativeandregulatoryburdenforsmallbusinesses inour industry issubstantialandsmall firmsarestrugglingtosurvive.Thesignsareclear,smallbusinessesfacedisproportionatecomplianceandauditcostsandwhilewehaveseenincreasesinregulationsandcompliancecosts,possiblythemostunreasonableandunfairisthatasmall,privatelyheld,non-custodialbrokeragefirmlikeoursisrequiredbylawandregulationtohireanexpensivePublicCompanyAccountingOversightBoard(PCAOB)-registeredauditfirm.The PCAOB audit requirementmakes sense for public companies and Broker-Dealers that carry customerfundsorsecurities,becausetheinvestingpublicandmarketsarepotentiallyatmuchgreaterriskfromthesecompanies.Conversely,thePCAOBrequirementsmakenosenseforprivately-held,smallnon-custodialfirmsthatdonotcarrycustomerfundsorsecurities.Currently,a3-person,non-publicsmallbusinessisheldtothesamestandardsasMerrillLynch;thisisnotright,fairorreasonable.Theone-size-fits-all PCAOBaudit standards thatweredesigned for significantlymore complex companies,and are priced exorbitantly, have been devastating to small businesses around the country. We simplycannotsustainthehumanandfinancialresourceburdenthattheseauditsplaceonoursmallfirms,timeandmoneythatweshouldbededicatingtoourcustomers,andweurgentlyneedlegislativerelief.Oureconomy ispoweredby smallbusiness.Our future jobgrowthdependsonsmallbusiness.Our futureeconomic prosperity and competitiveness depends on the ability of our small businesses to innovate andgrowintoindustryleadersacrossthecountry.Assmallbusinessownersandoperatorsacrossthecountry,weareaskingforyourhelpwiththisbipartisanissueofhelpingsmallbusinesses.Pleasehelpourfirmsandourcommunity of small businesses by supporting our efforts to get the Small Business Audit Correction Actsupported in Committee, brought to the floor of the Senate andHouse, and passed. Passing this Actwillprovidesignificantandmuchneededreliefforsmallbusinessesandourcustomersaroundthecountry.Thank you for your attention to this important issue. If you have any questions or would like additionalinformation,[email protected](801)733-9909.Thankyou,

TheSmallBusinessAuditCorrectionActof2018

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State Name SmallFirmAL Marc Whitehead HarborFinancialServices,LLCAK John Guthrie PTSecurities,LLCAR Mark Chambers Thrasher&Chambers,Inc.AR MaryEllen Williams Lieblong&Associates,Inc.AR Robert Keenan St.BernardFinancialServices,Inc.AZ James Williams Gogan&WilliamsAZ Bruce Hilby HilbyWilsonInc.AZ Patrick Conway FairportCapital,Inc.AZ Mark Howells M.S.Howells&Co.CA Gary Ching NPBFinancialGroup,LLCCA Neal Nakagir NPBFinancialGroup,LLCCA Shirley Coria NNPBFinancialGroup,LLCCA Richard Leach InvestmentSecurityCorporationCA James Fox JamesFoxSecurities,Inc.CA Morris Midkiff Midkiff&StoneCapitalGroup,Inc.CA William O’Connor O'Connor&CompanySecuritiesInc.CA Audrey McMahon AresInvestorServices,LLCCA Jose Portillo RHInvestmentCorporationCA Howard Feigenbaum SharemasterCA Jeffrey Joslin StockTradersCA Debra Draughan TopCapitalAdvisors,Inc.CA Christopher Mates OpusFinancialPartnersCA Stephen Perry JCPSecuritiesCA Deborah Higgins HigginsCapitalManagement,Inc.CA Eduardo Tovar PrivatePortfolio,Inc.CA Gary Sherwold G.W.SherwoldAssociates,IncCA Eduard Bagdasarian IntrepidInvestmentBankersLLCCA Michael Kane Transactiondrivers,LLCCA James Reilly StonepineAdvisors,LLCCA Joseph Delaney J.V.Delaney&AssociatesCA Thomas Courtney TheCourtneyGroup,LLCCA Kevin Breard Breard&AssociatesIncCPAsCA Thomas Korzenecki GrandAvenueCapitalPartners,LLCCA Allen Chi MainspringCapitalManagement,LLCCA Glen Haddock InvestmentArchitects,Inc.CA Charles Painter Painter,SmithAndAmbergInc.CA Maria Boyd InvestmentPlacementGroupCA Lisa Roth TesseraCapitalPartnersLLCCA Michelle Thomas WBBSecuritiesLLCCA Matthew Miller WBBSecurities,LLCCA Richard Levenson WesternFinancialCorporationCA Gil Mogavero JMPSecuritiesLLCCA Randy Fox AtelSecuritiesCorporationCA Donald Mahon BayridgeSecurities,LLC


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State Name SmallFirmCA Stephen Nasser CoitCapitalSecuritiesLLCCA Lloyd Leanse Prager&Co.,LLCCA Robert Blum RobertBlumMunicipals,Inc.CA Marieanne Jorajuria SharespostFinancialCorporationCA Alan Carlisle SofiSecuritiesLLCCA Weiming Ho IntegralFinancialLLCCA Paul Magnuson SiliconValleySecuritiesCA Mark Rogers N4Financial,Inc.CA Maia Mcgehee MercurySecurities,LLCCA Shieva Rajaee EQISCapitalManagement,Inc.CA Elizabeth Collins FinancialTelesisInc.CA Robert Santos ArrowrootPartners,LLCCA Joseph Helmer CaldwellSecurities,IncorporatedCA Nusheen Javadizadeh RjjPasadenaSecurities,Inc.CA Daniel Roberts Roberts&RyanInvestmentsInc.CA Carolie Smith AlamoCapitalCA Allison Kent-Aster AlamoCapitalCA Jerry Sanada AllianceAdvisory&Securities,Inc.CA Anthony Duckworth InvestmentArchitects,IncCO Phil Antico WithumSmithAndBrownCO Blaine Stahlman ProfessionalBroker-DealerFinancialPlanning,IncCO Chester Hebert ColoradoFinancialServiceCorporationCO Roberta Babitz AndrewsPartnersCO Maxine Johnson KesslerCompanyInvestments,Inc.CO John Vansant CascadeFinancialManagement,Inc.CO Caspar Ooms ClearcreekSecurities,LLCCO Robert Kessler Kessler&CompanyInvestments,Inc.CO Adam Carmel LarimerCapitalCorporationCO Gordon Yale TheYaleGroup,Inc.CO Patricia Kramer DestinyCapitalSecuritiesCorporationCO Stephen Kohn StephenA.Kohn&Associates,Ltd.CO Doug Brode ChristianFinancialServicesLLCCT Robert Malik CharterOakAssetManagement,Inc.CT Pasquale Lavecchia LavecchiaCapitalLLCCT William Poon CasimirCapitalL.P.CT Michael Butler CfsSecurities,Inc.CT Eugene Mauro QuattroMSecuritiesInc.DC Gregory Bowes AlbrightSecuritiesLLCDC John Mckenna HamiltonClarkSustainableCapital,Inc.DC Elizabeth Avery KaloramaCapital,LLCDC Larry Scully ScullyCapitalSecuritiesCorp.DE David Monahan CoastalEquitiesDE Stephen Sweeny Brittingham,Inc.DE Charles Reiling CoastalEquities,Inc.


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State Name SmallFirmFL Sarah Vegneron RenaissanceRegulatoryServicesFL Jed Bandes MutualTrustCo.OfAmericaSecuritiesFL Mark Beloyan TradespotMarketsInc.FL Victoria Ragland EquityInvestmentServices,IncFL Ruben Araneda BciSecurities,Inc.FL Indra Campbell ArcaCapitalInvestments,Inc.FL David Wilson EquifinancialLLCFL Susan Escobio SouthernTrustSecurities,Inc.FL Clifton Morris Mcduffie/MorrisFinancialGroup,Inc.FL S.David Moche CornwallPartners,LLCFL Michael Petagna AmericanMunicipalSecurities,Inc.FL Laura Crosby-Brown StillpointCapitalLLCFL Robert Schlitt SchlittInvestorServices,Inc.FL Karen Fischer BGStrategicAdvisorsFL Patricia Wells ValorFinancialSecuritiesLlcGA John Curran FintechSecuritiesGA Bruce Williamson FortressGroup,Inc.GA Marion Glover GloverCapital,Inc.GA Phyllis Johnson H&LEquities,LLCGA Aaron Prisco PropelAdvisoryGroup,Inc.GA Jeffrey Villwock LanierSecuritiesLLCGA Caroline Wisniewski BridgeCapitalAssociates,Inc.GU Sandra Mckeever AsiaPacificFinancialManagementGroup,Inc.HI MinWon Yang Sun'sBrothersSecuritiesInc.IA Timothy Weitzel WeitzelFinancialServices,Inc.IA Harley Whitfield AmericanEquityCapital,Inc.ID Christopher Miller AllegisInvestmentServicesLLCID Ryan Carlson AmericanIndependentSecuritiesGroup,LLCIL Darrell Butler BillowButler&Company,LLCIL Christopher Wurtzinger ForestSecurities,Inc.IL Margaret Wiermanski RapidExecutionServices,LLCIL Frederic Floberg TccSecurities,LLCIL Donald Grava VglGlobalLLCIL Gregory Taunt IasgAlternatives,LLCIL Randall Mitterling LiccarSecurities,LLCIL Donald Despain DespainFinancialCorporationIL Kevin Nicol NicolInvestorsCorporationIL Kenneth Sweet RelianceWorldwideInvestments,LLCIL James Correll CorrellCo.InvestmentServicesCorp.IL Tim Ogara ShannonAdvisorsLLCIL Charles Millington MillingtonInvestments,LLCIL Frank Chauner ChaunerSecurities,Inc.IL Stephen Mack MackInvestmentSecurities,Inc.IL Suzanne Bond InlandSecuritiesCorporation


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State Name SmallFirmIN Melvin Brewer CornerstoneFinancialServices,Inc.IN John Evanich Atis,IncIN Randall Mitterling AppliedCapital,LLCIN John Simmons MorrisGroup,Inc.IN George Steel PlannedInvestmentCo.,Inc.IN Tom Faust EdwardOpperman,CPAIN Timothy Peoples AmericanEquityInvestmentCorporationIN Edward Opperman EdwardOppermanCPAKS John Stepp CentralStatesCapitalMarkets,LLCKS Robert Hamman FirstAssetFinancialInc.KS Kristopher Miller TandemSecurities,Inc.KS Margaret Hornbeck Truenorth,Inc.KY Stanley Kerrick LexingtonInvestmentCompany,Inc.LA Raymond Thompson Dorsey&Company,Inc.LA Brian Marcotte JohnsonRice&CompanyLLCLA Craig Lewis LewisFinancialGroup,LLCMA David Oldaker NorthernCapitalSecuritiesCorporationMA H.Don Drake O'neilSecuritiesInc.MA Stephen Oleary AerisPartnersLLCMA Paige Rand AgcPartnersMA Michael O'hara ConsensusSecuritiesLLCMA Sumner Kaufman Kaufman&Company,LLCMA Tina Maloney Winslow,Evans&Crocker,Inc.MA Kristin Kennedy Wood(ArthurW.)Company,Inc.MA Lawrence Martel O'NeilSecurities,IncorporatedMA Matthew Stumpf AGCPartnersMA John Mccarty CharlesRiverBrokerage,LLCMA Richard Murphy NorthBridgeCapital,LLCMA Dayna Gant AppleLaneGroupLLCMA Gilbert Moreira DonegalSecurities,Inc.MA William Mccance AdvisoryGroupEquityServicesLtd.MA Bruce Fox AdvisoryGroupEquityServices,LtdMA Sherry Horn NorthBridgeCapitalMD Craig Fischer AtlanticSecurities,Inc.MD David Pringle FellsPointResearchLLCMD Carol Greenwald PotomacInvestmentCompanyMD Frederick Holloway Holloway&Associates,Inc.MD Ernest Brittingham InternationalMoneyManagementGroup,Inc.MD Thomas Schmidt TLSFinancialServices,Inc.MI Edward Schwartz GregoryJ.Schwartz&Co.,Inc.MI Laura Powers GregoryJ.Schwartz&Co.,Inc.MI Gregory Papesh Dart,Papesh&Company,IncorporatedMI Randall Hansen CentennialSecuritiesCompany,Inc.MI Jordan Powers CentennialSecurities


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State Name SmallFirmMI Mark Cleland DonnellyPenman&PartnersMI John Butterfield JackV.ButterfieldInvestmentCompanyMI Thomas Swiat Olmsted&Mulhall,Inc.MI Jason Welch WwkInvestments,Inc.MI Erica Momany KoehlerFinancial,LLCMI Craig Adams ConfidentialManagementFinancialServices,Inc.MN Todd Johnson CedarPointCapital,LLCMN Anthony Pence BlacktorchSecurities,LLCMN Michelle Sandberg Dougherty&CompanyLLCMN Jeannie Sonstegard Craig-HallumCapitalGroupLLCMN Tyler O'neill Craig-HallumCapitalGroupLLCMN Kimberly Chapman DSTMarketServices,LLCMN Patricia Bartholomew Craig-HallumCapitalGroupLLCMN Basil Joseph VanClemens&Co.IncorporatedMN Philip Wright BrokerbankSecurities,Inc.MN Todd Morgan StannardFinancialServices,LLCMN Thomas Laird T.E.LairdSecurities,LLCMN Thomas Laird T.E.LairdSecurities,LLCMN Thomas Martinson Martinson&Company,Ltd.MO Deborah Castiglioni Cutter&Company,Inc.MO Boyd Atteberry FinancialPlanningConsultants,Inc.MO Leann Knuth LabrunerieGroupMO Alexander Labrunerie LabrunerieFinancialServices,Inc.MO Michael Dardis CommerceBrokerageServices,Inc.MO Anton Burch Burch&Company,IncMO Sandra Dershem-Vega CountryClubFinancialServices,Inc.MO Marco Listrom Valdes&Moreno,Inc.MO Jenifer Burch Burch&Company,Inc.MO Patrick Hosty NeighborlySecuritiesMO Dana Bjornson GeorgeK.BaumCapitalAdvisors,Inc.MO David Miller GeneralSecuritiesCorpMO Trinity Lee Heim,Young&Associates,Inc.MO Dean Young Heim,Young&Associates,Inc.MO Deborah Mertz J.A.GlynnInvestmentsLLCMO Catherine Marshall HuntleighSecuritiesCorporationMO Norman Conley J.A.GlynnInvestments,LLCMO Robert Chambers HuntleighSecuritiesCorpMO Robert Hillard ArlingtonSecurities,Inc.MS James Coker Coker&PalmerMT Kimberly Smith S.G.Long&CompanyNC Larry Forrest SmithPointCapitalLtdNC Gregory Leneave AndersonLeneave&Co.NC Charlie Lucas Elevation,LlcNC Bennett Cole FalconbridgeCapitalMarkets,LLC


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State Name SmallFirmNC John Fennebresque Fennebresque&Co.,LLCNC Debra Gilboy P.R.Gilboy&Associates,Inc.NC Robert Abbott SouthAtlanticEnterprises,Inc.NC Fredrick Fisher MilestoneInvestments,Inc.NC Andrew Burch CarolinaSecurities,Inc.NC Melissa Hoots FalconSquareCapital,LLCNC William Sykes SykesFinancialServicesLLCND Garry Pierce GarryPierceFinancialServices,LLPND Brian Kraft AlerusSecuritiesCorporationNE Mark Bell CORClearingLLCNE Danielle Hampton FirstNationalCapitalMarketsNE Shirley Overly HaleySecurities,Inc.NE Todd Engle KuehlCapitalCorporationNE Thomas Teckmeyer TeckmeyerFinancialServicesLLCNE John Detisch WeitzSecurities,Inc.NH John Clarke 1stBccwCapitalCorpNH Robert Macleod BigelowCapitalSecuritiesLLCNH Thomas Lewry CurbstoneFinancialManagementCorporationNH James Tovey JLTCapitalPartnersLLCNH William King JSITransactionAdvisors,LLCNH Laura Crosby-Brown PronetFinancialPartnersLLCNH Lisa Durgan SecurePlanning,Inc.NH Douglas Drozdowski SWNSecuritiesLLCNJ Daryl Hersch CeladonFinancialGroupLLCNJ David Sokolower Repex&Co.,Inc.NJ Alan Achtel Aca/PrudentInvestorsPlanningCorporationNJ John Iannone QuantexClearing,LLCNJ John Kuhn AvatarCapitalGroupLLCNJ Granville Ungerleider WhitemarshCapitalAdvisorsNJ Juan Espinosa AptoPartners,LLCNJ Mark Furman CvfSecurities,Inc.NJ August Cellitti SecurevestFinancialGroupNJ Anthony Cianci FoxChaseCapitalPartners,LLCNJ John Frontero CrossPointCapitalLLCNJ Brent Hippert HardcastleTradingUsaLLCNJ Andrew Macinnes BrilliquidLLCNJ Kevin Hull RobertA.Stanger&Company,Inc.NJ Sheldon Grodsky GrodskyAssociates,Inc.NJ Randolph Rogers MerrionSecurities,LLCNM Randall Dry ThornnburgSecuritiesCorp.NV Kim Schmidt ElmcoreSecuritiesNV Sean Deson Deson&Co.NV Felix Danciu ElmcoreSecuritiesLLCNY Bonnie MannFalk MazarsUSALLP


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State Name SmallFirmNY Charles Pagano MazarsUSALLPNY Bruce Jackson CarverCrossSecuritiesCorp.NY Gary Hoch GaryHochAgency,Inc.NY John Rogers IntercoastalCapitalMarkets,Inc.NY Austin Rybstein A.C.R.Securities,Inc.NY Eytan Feldman OldCitySecuritiesLLCNY George Reichle A.P.Securities,Inc.NY Parbati Bhattacharya WestrockCapitalManagement,Inc.NY Dominick Scianandre HudsonHeritageCapitalManagement,Inc.NY Samantha Larew Manning&NapierInvestorServices,Inc.NY Michelle O'Brien Manning&NapierInvestorServices,Inc.NY Maureen O'Brien DynamoConsulting,LLCNY Carl Lanzisera FederatedSecuritiesNY Gloria Scheiman TGPrivateCapitalNY Arthur Loomis NortheastCapital&Advisory,Inc.NY Richard Carlesco IbnFinancialServices,Inc.NY James Westmacott WestcoInvestmentCorp.NY Barbara Fulcher WestcoInvestmentCorpNY Wendy Lanton LanternInvestmentsNY Dawn Haye GlauconCapitalPartners,LLC.NY Janice Parise SddcoGroupNY Robert Aufhauser AufhauserSecurities,Inc.NY Robert Solomon BeekmanSecurities,Inc.NY W.Stewart Cahn CahnCapitalCorp.NY Ronald Pasternak DbotAts,LlcNY E.Magnus Oppenheim E.MagnusOppenheim&Co.Inc.NY Howard Spindel SuryaCapitalSecuritiesLLCNY Garfield Miller AegisEnergyAdvisorsCorp.NY Victor Park AlternativeAssetInvestmentManagementSecuritiesNY Kevin Hourihan AshmoreInvestmentManagement(Us)CorporationNY Oliver Cromwell BentleySecuritiesCorporationNY Ian Green BrokerageselectNY W.Stewart Cahn CahnCapitalCorp.NY Michael Steinberg CcbInternationalOverseas(Usa)Inc.NY David Wong ColonialSecurities,Inc.NY Michael Kraus HTCapitalSecurities,LLCNY John Kiremidjian NBMarkets,Inc.NY Gerhard Summerer DZFinancialMarketsLLCNY Jason Eveleth Exane,Inc.NY Scott Abrams FinancoSecurities,LLCNY Ilan Lessick GmpSecurities,LLCNY William Hunnicutt Hunnicutt&Co.LLCNY Henry Marshall Hunter,Keith,Marshall&Co.,IncorporatedNY Bishen Pertab ICICISecuritiesInc.


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State Name SmallFirmNY Howard Spindel IIPSecuritiesLLCNY Robert Rabinowitz J.H.Darbie&Co.,Inc.NY John Loofbourrow JohnW.LoofbourrowAssociates,Inc.NY Leslie Feldman EurekaCapitalMarkets,LNY Sam Kopkind LwpartnersCapitalGroupLLCNY Lawrence May MayCapitalGroup,LLCNY Lawrence Walther MaybankKimEngSecuritiesUsaInc.NY George Ramirez MfrSecurities,Inc.NY Ann-Marie Baker MuzinichCapitalLLCNY Steven Perlstein MvpFinancial,LLCNY Robert Snider Omnicap,LLCNY Ruben Brache OpeningNightCapital,LLCNY Kenneth Boyar PalicoLLCNY Patrick O'meara ProforAdvisorsNY Robert Hackel R.F.Lafferty&Co.,Inc.NY Larry Kimmel Redburn(Usa)LlcNY M.Allison Steiner RhoneGroupAdvisorsLLCNY Martin Pollock EurekacapPartnersIncNY David Deblase SouthStreetSecuritiesLLCNY Steven Jafarzadeh Stonehaven,LLCNY Michael Cardello TerraCapitalMarketsLLCNY George Schinkel TheKleinGroup,LLCNY William Robertson TmCapitalCorp.NY Charles Gerber TriumphGlobalSecurities,Ltd.NY David Shields WellingtonShields&Co.,LLCNY Michael Lowenberg WhiteMountainCapital,LLCNY David Rappaport InvestecSecurities(US).LLCNY John Luttenberger MacroRiskAdvisorsLLCNY Alexander Mack MiddlemarchSecuritiesLLCNY Robert Kent MorningsideSecurities,LLCNY Brent Hippert AshtonStewart&Co.NY John Parmigiani AllliedMillenialNY Michael Mangieri SevenPointsCapital,LLCNY Andrew Epstein Gordon,HaskettNY Raymond Mendez BrittanyCapitalGroup,Inc.NY Constantine Baris LongshipAlternativeAssetMgmt,LLCNY Robert Stearns LongshipAlternativeAssetManagementNY Steven Rubenstein ArrowInvestments,Inc.NY Allan Goldstein TradeInformaticsLlcNY Joseph Lanzisera ExcelSecurities&Associates,Inc.NY Scott Zollo MutualFundsAssociatesInc.NY Wayne Holly Sage,Rutty&Co.,Inc.NY John Maceranka TheWindmillGroup,Inc.NY Olaf Neubert TopcapPartners,Inc.


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State Name SmallFirmNY John Pisapia ChelseaFinancialServicesNY Teresa Davies Burke&QuickPartnersLLCNY Philip Coombe CoombeFinancialServices,Inc.NY Jerome Keenan InternationalEquityServices,Inc.NY Steven Blecher MorganJosephTriartisan,LLCNY Stephen Distante VanderbiltSecurities,LLCOH Frank Panzeca ClarkSchaeferHackettCPAs&AdvisorsOH Peter Nerone GreatAmericanAdvisors,Inc.OH John Seibert J.D.Seibert&Company,Inc.OH Salvatore Raffa NorthcoastResearchPartnersOH Martin Rizzo NorthcoastResearchPartners,LLCOH Timothy Henahan Baker&Co.,Inc.OH Dock Treece TreeceFinancialServicesCorp.OH Melissa Henahan Baker&Co.,IncOK James Oplotnik AccessInvestments,Inc.OR Edward Curiel DLXFinancialGroup,LLLCOR Richard Goud HPSecurities,Inc.OR William Campbell EquilibriumCapitalServices,LLCOR Tanya DurkeeUrbach PaulsonInvestmentCompany,LLCPA Leona Robinson Robinson&Robinson,Inc.PA Betty Rainier BeaconsfieldFinancialServices,Inc.PA Richard Rainier BeaconsfieldFinancialServices,Inc.PA Mark Karbiner PmSecurities,LLCDbaPhoenixCapitalResourcesPA John Marsden JRMSecuritiesPA Peter Engelbach J.AldenAssociates,Inc.PA Steven Segal ParkCityCapital,Inc.PA Kevin Kornfield KevinHartKornfield&Company,Inc.PA James Oconnor BestvestInvestments,Ltd.PA Dale Pope MercapSecurities,LLCPA Mark Cresap Cresap,Inc.PA W.Dean Karrash Burke,Lawton,Brewer&Burke,LLCPA Brian Anderson Nestlerode&Loy,Inc.PA Judy Loy Nestlerode&Loy,Inc.PR John Holman EshCapital,LLCPR Ramon Thomas RdCapitalGroup,Inc.RI Wilson Saville Barrett&CompanyRI David Izzi Brown,Lisle/Cummings,Inc.RI Karen Bacon DiversifiedResources,LLCSC Nelson Arrington V.M.Manning&Co.,Inc.SC Edward Dowaschinski DunesSecuritiesCorporationSC Edward Dowaschinski DunesSecuritiesCorporationSC Joan Grava PalmettoAdvisoryGroupSC Derrick Grava PalmettoAdvisoryGroupSC Kenneth Wilson TRCMarketsLLC


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State Name SmallFirmSD Gregory Wilson VariableInvestmentAdvisors,Inc.TN Raymond Brandon BrandonInvestments,Inc.TN Dan Mayfield SanderlinSecurities,LlcTN Lisa James WileyBrosAintreeCapital,LLCTN Joel Oertling AvondalePartners,LLCTN James Murphy AvondalePartners,LLCTN David WileyIii WileyBros.-AintreeCapital,LLCTN David James PnfpCapitalMarkets,Inc.TN Thomas Altfillisch WesternEquityGroup,Inc.TX Byron Treat GreatNationInvestmentCorporationTX Dante Fichera IndependentInvestmentBankers,Corp.TX Jason Rivera AccSecurities,LLCTX Billy Sims BrazosSecurities,Inc.TX Travis Duren CrescentSecuritiesGroup,Inc.TX Chad Bailey GuidestoneFinancialServicesTX Lewis Fisher L.B.Fisher&CompanyTX Daniel Dooley MaplewoodInvestmentAdvisors,Inc.TX John Mauldin MauldinSecurities,LLCTX James Davis TexasCorporateCapitalAdvisorsTX Katherine Cook VenovateMarketplace,Inc.TX Jeremy Halpin GuidestoneFinancialServicesTX Carla Wright SignalSecurities,Inc.TX Ivan Singleton SignalSecurities,Inc.TX Robert Bagley BullishBobBagleySecurities,Inc.TX Robbi Jones KiplingJones&Co.,Ltd.TX Melinda Legaye MoodySecurities,LLCTX Kevin Regan RHCASecurities,LLCTX William Wilson SPSecuritiesLLCTX William Hoover StewardSecuritiesGroupLLCTX Patrick Smetek SunbeltSecurities,Inc.TX Randal Ferguson FirstWesternSecurities,Inc.TX Craig Kilpatrick FirstWesternSecuritiesTX Ilonka Nobles Nobles&Richards,Inc.TX Linde Murphy MEAllison&CoTX Christopher Allison M.E.Allison&Co.,Inc.TX David Mcnally McnallyFinancialServicesCorporationTX Heather Nelson MEAllisonTX Tiffany Fisher CNSSecurities,LLCTX Richard Sandow ForteSecuritiesLLCTX Timothy Kohn InvestorsBrokerageOfTexas,Ltd.TX Scott Taylor ScottT.Taylor,Ltd.UT James Dowd NorthCapitalPrivateSecuritiesCorporationUT Stephanie Holt NorthCapitalPrivateSecuritiesUT Betsy Voter MichaelBest


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State Name SmallFirmUT Eric Vos MoretonCapitalMarketsLLCUT Paige Pierce PSPConsultingVA Francis Stiff ChevalCapital,Inc.VA Robert Mann FirstGeorgetownSecurities,Inc.VA Shawn Mclaughlin MclaughlinRyderInvestments,Inc.VA Jennifer Szaro Lara,May&Associates,LLCVA Nicole Saunders NorthwestFinancialAdvisorsVA Robert Moreschi EasternPointSecurities,Inc.VA Kenneth Smither Smither&CompanyCapitalMarkets,LLCVA Donna Arles WealthforgeSecuritiesVA Mark Dempsey NavyFederalBrokerageServices,LLCVT Brian Mckenna D.B.Mckenna&Co.,Inc.VT Donald Mckenna D.B.Mckenna&Co.,Inc.WA Dick Smith DownUnderEnterprisesWA Michael Keller FSICWA James Humbard A&ASecuritiesLLCWA Sean Grubb NorthwestInvestmentAdvisors,Inc.WA Tim Vorpahl VorpahlWingSecuritiesWI Richard Peterson LibertyInvestmentCounsel,Ltd.WI Tami Strang ButtonwoodPartners,Inc.WI Mari Buechner CoordinatedCapitalSecurities,Inc.WI Gennady Bekasov HewinsBrokerageServices,LLCWI Michael Losse WillowCoveInvestmentGroup,Inc.WV Jacob Doyle FinancialWestGroupWV Timothy Bidwell Hazlett,Burt&Watson,Inc.WV Ami Shaver UnitedBrokerageServices,Inc.WV Rose Wilson WesbancoSecurities,Inc.

June25,2018TheHonorableJebHensarling TheHonorableMaxineWatersChairman RankingMemberCommitteeonFinancialServices CommitteeonFinancialServicesU.S.HouseofRepresentatives U.S.HouseofRepresentativesWashington,DC20515 Washington,DC20515DearChairmanHensarlingandRankingMemberWaters:Theundersignedpeople,ataminimumandrepresentingsmallbusinesses in49of50states (therearenosmallbrokeragefirmsheadquarteredinWyoming…YET),stronglyurgeCongresstopassbipartisanlegislation,TheSmallBusinessAuditCorrectionActof2018(HR6021),co-sponsoredbyRepresentativesFrenchHill(R-AR)andVicenteGonzalez (D-TX),whichwould requesta specificexemption for small,privatelyheld,non-custodialbrokersanddealersingoodstandingfromTitleOneofSarbanes-OxleyrequirementtohireaPublicCompanyAccountingOversightBoard(PCAOB)-registeredauditfirm.Thelegislativeandregulatoryburdenforsmallbusinesses inour industry issubstantialandsmall firmsarestrugglingtosurvive.Thesignsareclear,smallbusinessesfacedisproportionatecomplianceandauditcostsandwhilewehaveseenincreasesinregulationsandcompliancecosts,possiblythemostunreasonableandunfairisthatasmall,privatelyheld,non-custodialbrokeragefirmlikeoursisrequiredbylawandregulationtohireanexpensivePublicCompanyAccountingOversightBoard(PCAOB)-registeredauditfirm.The PCAOB audit requirementmakes sense for public companies and Broker-Dealers that carry customerfundsorsecurities,becausetheinvestingpublicandmarketsarepotentiallyatmuchgreaterriskfromthesecompanies.Conversely,thePCAOBrequirementsmakenosenseforprivately-held,smallnon-custodialfirmsthatdonotcarrycustomerfundsorsecurities.Currently,a3-person,non-publicsmallbusinessisheldtothesamestandardsasMerrillLynch;thisisnotright,fairorreasonable.Theone-size-fits-all PCAOBaudit standards thatweredesigned for significantlymore complex companies,and are priced exorbitantly, have been devastating to small businesses around the country. We simplycannotsustainthehumanandfinancialresourceburdenthattheseauditsplaceonoursmallfirms,timeandmoneythatweshouldbededicatingtoourcustomers,andweurgentlyneedlegislativerelief.Oureconomy ispoweredby smallbusiness.Our future jobgrowthdependsonsmallbusiness.Our futureeconomic prosperity and competitiveness depends on the ability of our small businesses to innovate andgrowintoindustryleadersacrossthecountry.Assmallbusinessownersandoperatorsacrossthecountry,weareaskingforyourhelpwiththisbipartisanissueofhelpingsmallbusinesses.Pleasehelpourfirmsandourcommunity of small businesses by supporting our efforts to get the Small Business Audit Correction Actsupported in Committee, brought to the floor of theHouse and Senate, and passed. Passing this Actwillprovidesignificantandmuchneededreliefforsmallbusinessesandourcustomersaroundthecountry.Thank you for your attention to this important issue. If you have any questions or would like additionalinformation,[email protected](801)733-9909.Thankyou,

TheSmallBusinessAuditCorrectionActof2018(HR6021)

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State Name SmallFirmAL Marc Whitehead HarborFinancialServices,LLCAK John Guthrie PTSecurities,LLCAR Mark Chambers Thrasher&Chambers,Inc.AR MaryEllen Williams Lieblong&Associates,Inc.AR Robert Keenan St.BernardFinancialServices,Inc.AZ James Williams Gogan&WilliamsAZ Bruce Hilby HilbyWilsonInc.AZ Patrick Conway FairportCapital,Inc.AZ Mark Howells M.S.Howells&Co.CA Gary Ching NPBFinancialGroup,LLCCA Neal Nakagir NPBFinancialGroup,LLCCA Shirley Coria NNPBFinancialGroup,LLCCA Richard Leach InvestmentSecurityCorporationCA James Fox JamesFoxSecurities,Inc.CA Morris Midkiff Midkiff&StoneCapitalGroup,Inc.CA William O’Connor O'Connor&CompanySecuritiesInc.CA Audrey McMahon AresInvestorServices,LLCCA Jose Portillo RHInvestmentCorporationCA Howard Feigenbaum SharemasterCA Jeffrey Joslin StockTradersCA Debra Draughan TopCapitalAdvisors,Inc.CA Christopher Mates OpusFinancialPartnersCA Stephen Perry JCPSecuritiesCA Deborah Higgins HigginsCapitalManagement,Inc.CA Eduardo Tovar PrivatePortfolio,Inc.CA Gary Sherwold G.W.SherwoldAssociates,IncCA Eduard Bagdasarian IntrepidInvestmentBankersLLCCA Michael Kane Transactiondrivers,LLCCA James Reilly StonepineAdvisors,LLCCA Joseph Delaney J.V.Delaney&AssociatesCA Thomas Courtney TheCourtneyGroup,LLCCA Kevin Breard Breard&AssociatesIncCPAsCA Thomas Korzenecki GrandAvenueCapitalPartners,LLCCA Allen Chi MainspringCapitalManagement,LLCCA Glen Haddock InvestmentArchitects,Inc.CA Charles Painter Painter,SmithAndAmbergInc.CA Maria Boyd InvestmentPlacementGroupCA Lisa Roth TesseraCapitalPartnersLLCCA Michelle Thomas WBBSecuritiesLLCCA Matthew Miller WBBSecurities,LLCCA Richard Levenson WesternFinancialCorporationCA Gil Mogavero JMPSecuritiesLLCCA Randy Fox AtelSecuritiesCorporationCA Donald Mahon BayridgeSecurities,LLC