In June 2018, Bates Group published an article reporting on deficiencies identified by FINRA in its exam findings which may trigger further scrutiny. In that article we noted FINRA’s focus on the Uniform Transfer to Minors Act (UTMA), among other exam topics. FINRA is looking at whether firms have adequate policies and procedures in place to comply with the UTMA and Uniform Gifts to Minors Act (UGMA), and how those policies and procedures are operationalized. Specifically, as we reported, it is seeking to ensure that control over accounts is passed to the beneficiaries once the minors reach the statutory age (18 or 21 in most states; an alternative age is permitted in a dozen or so other states).
How Bates Helps
Bates is working with clients to closely review their UTMA/UGMA client account records to identify the impacted populations, whether control over the accounts has transferred, and whether trading activity has occurred and commissions have been generated once beneficiaries have reached the statutory ages for control over the accounts.