BBVA Securities failed to watch how often its reps swapped out deferred variable annuities. They relied on checking each trade one by one instead of looking at the big picture.
Failure to monitor rates of deferred variable annuity (VA) exchanges
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BBVA Securities Inc. failed to watch deferred VA exchange rates. This lapse lasted from March 2019 to August 2021. The firm didn’t set up a system to track these rates. Tracking is key to stopping bad actions and making sure products fit customers.
FINRA rules say firms must do this.
The lack of monitoring led to bigger issues. BBVA relied on checking each trade alone. They didn’t look at the big picture of exchange rates. This made it hard to spot patterns that might show problems.
The firm’s failure to watch these rates closely was part of why FINRA fined them.
Reliance on transaction-by-transaction approvals
Moving from the lack of VA exchange monitoring, BBVA also had issues with how they approved trades. The firm used a system where each VA exchange needed approval from regional bosses.
This method didn’t work well. It failed to spot patterns or high rates of exchanges by some reps.
BBVA’s approach was too narrow. They only looked at one trade at a time. This made it hard to see the big picture. The firm missed chances to catch problems early. They couldn’t tell if some reps were doing too many exchanges.
This gap in their system led to trouble with FINRA rules.
Inadequate periodic reports and monitoring system
BBVA’s system for checking VA exchanges had gaps. Their reports only showed one month of trades at a time. This made it hard to spot trends. The reports didn’t show how often each rep swapped VAs overall.
BBVA also lacked a good way to watch VA exchange rates. They had no alerts or special reports to flag high rates. This left them open to missing important patterns. The Financial Industry Regulatory Authority found these issues troubling.
Written Supervisory Procedures (WSPs) Deficiencies
BBVA Securities Inc. failed to provide clear rules for checking VA exchange rates. Their WSPs lacked steps for spotting patterns in these exchanges.
Lack of guidance on assessing representatives’ rates of deferred VA exchanges
BBVA Securities’ rules didn’t tell staff how to check VA exchange rates. This gap made it hard to spot problems. From March 2019 to August 2021, the firm lacked clear steps for this task.
Staff couldn’t easily find odd patterns in exchange rates.
The SEC looks at firms like BBVA to protect investors. Without good rules, firms can miss risky trades. I’ve seen how this can hurt people’s savings. Clear guides help keep everyone safe.
BBVA’s mistake shows why firms need strong rules for all trades.
Absence of instructions for identifying patterns in exchange rates
BBVA Securities Inc. failed to give clear rules for spotting patterns in exchange rates. This gap left the firm open to risks. The company’s guides didn’t say how to find trends that needed more checks.
Without these steps, BBVA couldn’t catch issues that might hurt investors.
The lack of instructions made it hard to protect clients. BBVA relied on weak methods to watch over trades. They used simple approvals for each deal and basic monthly reports. These tools weren’t enough to catch problems with variable annuity exchanges.
As a result, BBVA broke FINRA Rules 3110, 2330, and 2010.
Violations under FINRA Rules
FINRA found BBVA Securities broke several rules. These rules aim to protect investors and keep the market fair.
Categorization under FINRA Rules 3110, 2330, and 2010
BBVA Securities broke three FINRA rules. Rule 3110 says firms must watch over their business. Rule 2330 covers how firms handle special types of annuities. Rule 2010 sets standards for how firms should act.
These rules make sure firms do right by their clients.
FINRA wants firms to follow clear steps. Each office must have written rules. They must share these rules with their staff. This helps everyone know what to do. It also helps protect investors from bad choices or mistakes.
Consequences and Censure
FINRA hit BBVA Securities with a big fine. The firm must pay $150,000 and face public shame for breaking rules.
$150,000 fine and censure from FINRA
FINRA hit BBVA Securities Inc with a big fine. The firm must pay $150,000 for breaking rules. This happened from March 2019 to August 2021. FINRA also gave BBVA a censure. This means they got a public scolding.
The fine came after BBVA broke some key rules. These were FINRA Rules 3110, 2330, and 2010. These rules are about how firms should watch over their business. BBVA didn’t do a good job watching its agents sell certain products.
They didn’t check if agents were switching clients’ accounts too much.
Conclusion
BBVA’s fine shows the need for better checks on annuity trades. Firms must watch how often reps swap these products. Good rules and systems can stop problems before they start. Investors should ask questions about any annuity changes.
Smart oversight keeps everyone safe in the money world.
