2.  Copies of documentation provided by Firm to customer or trader when establishing a DMA relationship, including but not limited to, instructive or informational documentation, new acct forms, margin agreements, trading authorizations;

3.  State whether Firm has undertaken any risk assessment of its DMA business. If so, describe assessment undertaken, copy of any findings, description of any undertakings in response to the results of assessment;

4.  In e-format, provide all WSPs in place governing the Direct Market Access business at Firm;.

5.  In e-format, provide a complete set of Firm's written pols and procedures that relate to, refer to, or concern all aspects of Firm's AML program in effect since 1/1/09;

6.  Describe in detail all independent testing for AML compliance performed from 1/1/09 to present - include name and background of the individuals conducting the testing;  provide a copy of results of the testing, including but not limited to, written reports, memoranda, analyses;  identify any undertakings by Firm as a result of the testing;

7.  If Firm permits master/sub-accounts, explain in detail the process used by Firm to determine whether a master/sub-account can be recognized as 1 customer account or as separate accounts for purposes of FINRA Rules, the federal securities laws, the Bank Secrecy Act and other applicable federal laws;

8.  If Firm permits accounts with multiple trader log-ons, describe how these accounts are reviewed and approved for opening;

9.  Describe Firm's process in establishing standards for position and credit limits for DMA accounts. Describe any monitoring Firm conducts on an ongoing basis of position and credit limits;

10.  Describe in detail Firm's procedures for reviewing for suspicious activities, types of tools employed in the monitoring, and manner in which they're utilized.  Suspicious activities include suspicious securities trading, securities movement, and money movement.  Response should include, but not be limited to:

• A list of each type of exception, surveillance or risk monitoring report or other tools used by Firm to monitor for suspicious activities.  Describe in detail the tool or report, including information on frequency with which report is run or tool is utilized, type of activity the tool or report is set up to monitor (including the parameters set), and manner in which data is gathered, interpreted and used by Firm;
• Identify individual(s) responsible for using tool or reviewing report, and names of all individuals receiving copies of report or a sub-set of report;
• Copies of all procedures, explanatory documents or guidelines used in connection with each report or tool;
• Copy of each type of exception report or system output identified above for June and December 2009;
• If no exception, surveillance or risk monitoring reports or tools are utilized, describe in detail reviews conducted to monitor for suspicious transactions;

11.  Indicate: (a) the percentage of accounts engaged in DMA as of 12/31/09 and (b) percentage of foreign accounts as of 12/31/09.

To access, click onto:   [ FINRA Targeted Exam Letters, August ]