Providing problem member firms with the tools to improve sales compliance

(Forwarded by email to both the MFDA and IDA)


In January 2006, PureLogix Corp. released a new Internet driven software platform called Compliance Net. Compliance Net is designed to help branch managers and compliance departments of MFDA/IDA member firms more quickly and accurately identify and follow up on a number of compliance problems, currently including:

1. Unsuitable investments
2. Stale-dated Know Your Client data
3. Over-concentration in a single security in a client account
4. Accumulation of a security in multiple client accounts
5. Trades in unauthorized products
6. Churning in client accounts
7. Unilateral mutual fund substitutions
8. Listed Persons under U.N. Suppression of Terrorism Regulations to help combat the financing of terrorism
9. Suspicious transactions for Proceeds of Crime
10. Accounts held in non-cooperative countries and territories as determined by the Financial Action Task Force on money laundering

On top of automatically detecting the above mentioned compliance issues, Compliance Net is also live-linked to individual advisor portals. This gives advisors in the field an on-demand solution that not only identifies accounts that require attention, these advisor portals also give advisors the ability to double-check suitability of suggested transactions prior to the trade being presented to the investor. Clearly, MFDA/IDA member firms considering leasing Compliance Net will have big advantages over member firms that continue trying to detect and follow up on compliance issues by hand.

PureLogix Corp. has noted the IDA decision to assign a compliance monitor to help get Union Securities Inc. to comply with MFDA/IDA policy. We believe PureLogix Corp. could provide a similar service for the MFDA/IDA by providing Compliance Net for a member firm’s compliance department, advisor portals for advisors in the field, and an MFDA/IDA management portal for Compliance Net.

This management portal would be a powerful tool that would give the MFDA/IDA the ability to monitor sales compliance conditions at the problem member firm in real time. As the member firm started clearing the back-log of compliance issues, Compliance Net would automatically report the improving conditions to the MFDA/IDA, thereby reducing the need for more frequent audits, and as well as the likelihood of a firm ignoring MFDA/IDA compliance review recommendations.

I think you will agree, providing the MFDA/IDA with a live monitoring service would be an invaluable tool for the MFDA/IDA to gauge whether conditions are improving or worsening at a problem member firm. And from the member firm’s perspective, by being provided Compliance Net, there is now a capable tool and a reasonable game-plan for getting all branches into compliance within a very short period of time.

I’ve attached marketing material for your review. If the MFDA/IDA would be interested in viewing an online demonstration of Compliance Net’s capabilities, please feel free to call or email for an appointment.

Sincerely,

Edward Iftody
President
PureLogix Corp.