Ensuring trained sales staff

During the applicant process and before a salesperson starts employment, the central
compliance/human resources should perform a due diligence check on the potential
employee. This review includes a background check including credit history and
verification of past employment and education.
Once hired, central compliance will oversee the license application requirements
and sponsor the employee for testing. Once the appropriate tests (typically Series 7
and Series 63) are passed, the employee will be approved for contact with customers.
Given the variety of disciplines involved in creating and selling derivatives it is a
prudent precaution that all individuals involved in packaging or assembling are
appropriately licensed. In some companies, anyone on the trading floor must be
licensed in order to avoid any inadvertent lapses. In light of employee turnover
due to mergers and market changes, some employees may arrive pretrained and
prelicensed. Special attention should be given to ensuring that these experienced
employees are trained in how your firm focuses on compliance and what standard is
required. These employees may have learned various short cuts or expedited processes
and you want to ensure these processes fall within your requirements. As a
business person is licensed, there is also a need to train them in the internal policies
and practices of the firm.
There should be a compliance manual disseminated by e-mail or resident in a
database. In addition, a hard-copy manual should be retained for reference within
the employee’s immediate work area. Updates to compliance procedures should be
prominently noted, numbered, dated, and sent by e-mail and hard copy. The manual
should contain an appendix with an organizational chart indicating clearly who has
the supervisory role and both the employee and supervisor should confirm that
relationship in writing on an annual basis. Formalized checklists should be provided
to help guide the salespeople and traders to operate within the guidance provided. It
is best to have a continuously updated distribution list so that those who need to
know, get the message.

The compliance information should be standardized to ensure that the same
requirements are disseminated and known throughout the firm. It should be perceived
as being part of the job, part of normal, required activities. Because things
are getting done should not end the inquiry. It may be due to the Herculean efforts
by a few that the job is accomplished or perhaps it is being done informally without
proper documentation.