FOCUSPOINT INN PERSON EXAMPLES OF THINGS DONE

A "retail customer" for Reg BI purposes is: (B) Uses the recommendation primarily for personal, family, or household purposes.

"Personal, family or household purposes" means any recommendation to a natural person for his or her account (including retirement accounts), other than recommendations to natural persons seeking services for commercial or business purposes.

In general, all statements by placement agents will be considered compensated endorsements under the new Marketing Rule.

(1) Review and consider amending placement agent agreements (or entering into side agreements) to allow the RIA to comply with the Marketing Rule (2)Develop internal policies and procedures on how the RIA will oversee the activities of the placement agent

The following three conditions apply to the use of testimonials and endorsements:

(1) TESTIOMONIAL DUE DILLIGENCE RULE: (2)Disclosure. (3) Advisor Oversight and Compliance

WHAT IS CONSIDERED COMPENSATION? The second prong of the definition of advertisement is triggered by any form of compensation that an adviser provides directly or indirectly for an endorsement or testimonial.

(1) fees, (2) retainers, (3) reduced advisory fees, (4) fee waivers, (5) directed brokerage,

FINRA 2111 SUITABILITY INSTITUTIONAL-CUSTOMER EXEMPTION

(1) whether a broker "has a reasonable basis to believe the institutional customer is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies involving a security or securities" AND (2) whether "the institutional customer affirmatively indicates that it is exercising independent judgment"

(14) maintained and monitored restricted lists. (15) Reviewed and assessed for any potential conflicts or violations of the firm's Code of Ethics, including surveillance of communications of employees. (15) Prepared, delivered, and tracked compliance training.

(14) maintained and monitored restricted lists. (15) Reviewed and assessed for any potential conflicts or violations of the firm's Code of Ethics, including surveillance of communications of employees. (15) Prepared, delivered, and tracked compliance training.

(16) Assisted clients in performing supervision required by FINRA Rules 3110, 3120, and 3130. (17) Helped clients register as RIAs and ensured they were adequately supervising Investment Advisor Representatives and other"supervised persons" to comply with the Investment Advisor Act. (18) Filed form D notices for security registration exemption notices for companies who sold securities that didn't require SEC

(16) Assisted clients in performing supervision required by FINRA Rules 3110, 3120, and 3130. (17) Helped clients register as RIAs and ensured they were adequately supervising Investment Advisor Representatives and other"supervised persons" to comply with the Investment Advisor Act. (18) Filed form D notices for security registration exemption notices for companies who sold securities that didn't require SEC Rule 506 All Form D filings for Rule 506 offerings must be submitted through the Electronic Filing Depository ("EFD"), a web-based system that allows you to submit notice filings and pay the associated filing fee electronically. (19) Advised clients on how to prepare for SEC exams, performed mock SEC exams, regulatory inquiries, mock audits

(1) Assisting with forming, registering, maintaining, and dissolving GPs,corporations, limited liability companies, and other legal entities,

(1A) including with respect to confirmation of name availability, 1A.2) Obtaining name reservations, (1B) payment of annual and other taxes and fees, (1C) drafting and or filing of all necessary documents, ADVISING ON FUND STRUCTURE & AGREEMENTS (1D) obtaining employer identification numbers, and (1E) preparing and maintaining minute books. (1F) FOREIGN QUALIFICATION- BUS ENTITY WANTS TO DO BIZ IN ANOTHER STATE IN ADDITION TO STATE WHERE BIZ WAS FORMED Have filled out and filed annual reports. (maintenance taks-LLC & CORP) Convert and transmit EDGAR access codes and maintain minute books and stock ledgers.

MARKETING RULES-TEST & ENDORSE EXEMPTIONS from DISCLOSURE REQUIREMENTS OF these testimonial and endorsement conditions for B-Ds, including:

(2) persons who are NOT "Retail Customers" (as defined by REG BI)

Enhanced Due Diligence (EDD) is type of know-your-customer (KYC) processes that firms to check their customers. (high risk)

(A) Any business in a country on the High-Risk Third Countries list (B) Politically Exposed Persons (PEPs) or their close circles, such as family members (1)State-Owned Enterprises: A PEP would typically be anyone from a senior executive upwards. (2) PEPs in Government Roles (3) PEPs in Organizations and Financial Institutions & Armed Forces (C)Companies in sectors with a higher risk of money laundering, such as gambling (D)Shell corporations (E) Companies that funded terrorist activities and blacklisted

The following three conditions apply to the use of testimonials and endorsements: Advisor Oversight and Compliance.

(A) Reasonable Basis Requirement (B) Written Agreement Requirement

MAINTAINED-Serving as liaison between clients and attorneys regarding the organization and maintenance of legal & compliance files including

(A) corporate records, Corporate records are the documents that show to the IRS and local governing agencies that your business is following required laws. (B) minute books, and (C) various tasks associated with entity maintenance. (D) Entity agreements including formation, maintenance, dissolution, etc (E)compliance manual (F) compliance policies (G) annual CCO reports (H) annual anti-money laundering audit/ AML program & policies (I) Risk exposure reports and annual risk assessment (J) FINRA 3110, 3120, 3130 written policies, supervisory control policies and procedures (SCPs), annual reports & certification

A testimonial or endorsement by the investment adviser' partners, officers, directors, employees, or affiliates is exempt from BOTH the foregoing disclosure and written agreement conditions provided that the affiliation is either

(A) readily apparent; OR (B) adequately disclosed/documents at the time the testimony or endorsement is given.

In general, all statements by placement agents will be considered compensated endorsements under the new Marketing Rule. (2)Develop internal policies and procedures on how the RIA will oversee the activities of the placement agent

(A)Agree on form and timing of required disclosures; (clear & prominent disclosure requirement) (material terms of comp agreements & material conflicts) If a specific amount of cash compensation is paid, the disclosure should include that amount, and if the compensation is a percentage of the total advisory fee over a period of time, then the disclosure should include the percentage and time period

In general, all statements by placement agents will be considered compensated endorsements under the new Marketing Rule. (2)Develop internal policies and procedures on how the RIA will oversee the activities of the placement agent

(B) Monitoring and testing of placement agent's compliance; Requiring use of adviser-approved written materials or compliance with scripts, restrictions or guidelines as to what placement agents (and their personnel) can communicate with investors (e.g., re: performance) and how they communicate with investors (e-mails, text, social media, etc.);

In general, all statements by placement agents will be considered compensated endorsements under the new Marketing Rule. (2)Develop internal policies and procedures on how the RIA will oversee the activities of the placement agent

(B) The method for obtaining the necessary records (g)Any documentation showing that an adviser has a reasonable belief that a testimonial or endorsement complies with the Marketing Rule's due diligence requirement (h)Any documentation showing that an adviser has a reasonable belief that a third-party rating complies with the Marketing Rule's due diligence requirement information used to establish third-party ratings, (i) A copy of any questionnaire or survey that has been used to create a third-party rating included in an advertisement.

Conflicts that are inherent to the business model of BD AND PRODUCTS

(I) Commission compensation creates an incentive to maximize transactions. In the brokerage model, the firm and financial professional get paid only if a recommendation results in the completion of a transaction. (II) AUM fees create an incentive to gather assets.

MARKETING RULE books & record amendment

(I) records of all advertisements they disseminate, including certain internal working papers, (II) performance related information, and (III) documentation for oral advertisements, testimonials, and endorsements.

MAINTAINED-Serving as liaison between clients and attorneys regarding the organization and maintenance of legal & compliance files including

(L) Compliance training materials (M) Business Code of Ethics (O) restricted lists, watch lists, sanctions screenings (P) KYC internal and external requests and reports (Q) SARs reports, ETC. ​​​​PRIVATE PLACEMENT MEMORANDUMS A due diligence questionnaire, referred to by the acronym DDQ,

Be a subject matter expert with respect to Broker Dealer compliance, including but not limited to, (a) marketing reviews & updates

(OBVS MARKETING HEAVY-trade shows, GP presentations, marketing strategies, develop teaser & fund presentation) EXTREMELY IMPORRTANT BC MARKETING RULES EFFECT PLACEMENT AGENT & THIRD PARTY RECS OF PRIVATE FUND INVESTMENTS & STRATEGIES-ALSO BROKER-DEALER SPECIFIC EXEMPTIONS)

Was key contact person for regulators & other state and federal agencies

(a) SEC (exams, inquiries, FINRA, CFTC) (b) State, federal, and foreign gov agencies for compliance reasons as well as other things like corporate matters (bus entity formation, maintenance matters) (c) Other filings & requirements & docs already mentioned above (d) External auditor, internal auditor, (e) Basically contact with whoever we needed to communicate with for any requirements, issues, questions, etc. (f) Liaison between all departments, business, legal, compliance, etc.

The following three conditions apply to the use of testimonials and endorsements: (1)Disclosure.

(a) The following must be clearly and prominently disclosed: (i) if a testimonial, that it was given by a current client or investor, or if an endorsement, that it was given by a person other than a current client or investor;

The following three conditions apply to the use of testimonials and endorsements: (1)Disclosure.

(a) The following must be clearly and prominently disclosed: (i) if a testimonial, that it was given by a current client or investor, or if an endorsement, that it was given by a person other than a current client or investor; (ii) if applicable, that cash or non-cash compensation was provided for the testimonial or endorsement; AND (iii) a brief statement of any material conflicts of interest on the part of the person giving the testimonial or endorsement resulting from the adviser's relationship with such person.

MARKETING RULE books & record amendment

(a) Written or recorded materials used in all oral or verbal advertisements (b) Written communications relating to the rate of return or performance of any portfolios (c )Any material used to demonstrate how the performance or rate of return of any portfolios are calculated (d)Any records that showcase the hypothetical performance of a portfolio or investment (e)Any communications relating to predecessor performance (f)Records of who the "intended audience" of any hypothetical performance documentation

Reg BI's obligation to act in the retail customer's best interest is satisfied by complying with the rule's four component obligations:

(i) Disclosure Obligation, (ii) Care Obligation, (iii) Conflict of Interest Obligation, and (iv) Compliance.Obligation

KYC due diligence & SARs reporting

(relevant) include appropriate risk-based procedures for conducting ongoing customer due diligence, including (i) understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; (ii) conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information, including information regarding the beneficial owners of legal entity customers. to monitor customers for "suspicious" activities and to report those activities to the Treasury Department's Financial Crimes Enforcement Network ("FinCEN").

Reg BI, the SEC stated its interpretation that a customer "USES" a recommendation when, as a result of the recommendation:

**COMPENSATION NOT REQUIRED FOR CUSTOMER TO USE REC (A) The customer opens a brokerage account with the broker-dealer, regardless of whether the broker-dealer receives compensation; (B) The customer has an existing account with the broker-dealer and receives a recommendation from the broker-dealer, regardless of whether the broker-dealer receives or will receive compensation, directly or indirectly, as a result of that recommendation; OR ( C) The broker-dealer receives or will receive compensation, directly or indirectly as a result of that recommendation, even if that retail customer does not have an account at the firm

PLACEMENT AGENT FEES

A placement agent should only be given credit for the amount of capital commitments made by investors that are admitted to the fund by the general partner of the fund. Administratively, it is easiest for a fund manager to agree in the Placement Agreement that all of the placement agent's fees with respect to the fund being raised will be paid some reasonable period following the final closing of such fund.

Does Regulation Best Interest apply to limited purpose broker-dealers, for example, broker-dealers that make recommendations of private offerings to accredited investors?

A: Yes, if that accredited investor is a "retail customer" as defined in the rule. The definition of "retail customer" does not exclude high-net worth natural persons and natural persons that are accredited investors.

USA PATRIOT Act amended and strengthened the BSA. It imposed a number of AML obligations directly on broker-dealers, including:

AML compliance programs; customer identification programs; obtaining beneficial ownership information and customer due diligence; monitoring, detecting, and filing reports of suspicious activity; due diligence on foreign correspondent accounts, including prohibitions on transactions with foreign shell banks; due diligence on private banking accounts;

Consulted alternative investment clients on how to create top-notch policies addressing AML requirements, counter-terrorist, financing CTF regimes, KYC/KYI rules, SAR obligations, and OFAC asset blocking and reporting requirements.

Advised clients on requirements and best practices for AML and KYC policies, including being key contact person for external KYC requests and data and research providers.

MARKETING RULE books & record amendment

Advisers should take steps to ensure they make and keep records of all advertisements they directly or indirectly disseminate.(for example: by placement agents) investment advisers to make and keep certain records relating to marketing materials, including all advertisements they disseminate (or are distributed on their behalf, for example, by a placement agent) and the backup documentation substantiating material statements of fact contained in such advertisements. The SEC also amended investment adviser recordkeeping requirements to include preserving copies of all advertisements; (have easy to find location if need to be shown)

PLACEMENT AGENTS & REGULATION BEST INTEREST Placement agents in private securities offerings may have new obligations under SEC Regulation Best Interest ("Reg BI") when dealing with natural persons.

Although placement agents are retained by issuers, and generally limit their marketing activities to institutions and high-net-worth individuals, they are required to meet certain standards of care when making recommendations to customers. Reg BI may raise the standard of care for placement agents engaged in the sale of securities to individual investors, including trusts and certain family offices who are currently treated as "institutional customers." The adoption of Reg BI represents a significant change to the regulation of broker-dealer standards of conduct.

MARKETING RULES-TEST & ENDORSE EXEMPTIONS from DISCLOSURE REQUIREMENTS OF these testimonial and endorsement conditions for B-Ds, including: (2) persons who are NOT "Retail Customers" (as defined by REG BI)

BUT Such broker-dealer is STILL REQUIRED to make the disclosures that are subject to the "clear and prominent" standard.

Perform risk analysis on business deals, potential mergers, transactions, business formations and clients WAYS TO PERFORM DUE DILIGENCE:

Base off (1) corporate records (ex: corp financials, business structure, goals, purpose in formation docs, minute books) (2) Lien Searches (UCC, State & Fed, Judgement) (3) Legal Due Dilligence, (4) IP searches A due diligence questionnaire, referred to by the acronym DDQ, is a list of questions designed to evaluate aspects of an organization prior to a merger, acquisition, investment or partnership.

FINDING INFO ON & DISCOVERING IDENTITY OF A BENEFICIAL OWNER-

Beneficial ownership is when any natural person ultimately owns or controls a contracted counterparty or legal entity. The ultimate beneficial owner (UBO) is the natural person on whose behalf a transaction or activity is being conducted. Understanding beneficial ownership of an entity is fundamental to an effective risk mitigation program regardless of geographic location. In order to hide one's ownership interest, a UBO's identity is often shielded by shell companies, nominal directors and false paperwork.

PARTIAL EXEMPTIONS FOR CERTAIN PERSONS FROM DISQUALIFICATION PROVISIONS (Testimonial-Marketing) Rule 506(d) Covered Persons.

Compensated Solicitors All persons who have been or will be paid, directly or indirectly, remuneration for solicitation of investors are covered by Rule 506(d). marketing personnel of the general partner, managing member, or investment manager of a private fund may be "covered persons" for purposes of Rule 506(d).

(12) Assisted in the implementation of the firm's anti-bribery and corruption programs.

Gifts & entertainment & pay-to-play

Perform the required Know Your Client (KYC)/Know Your Intermediary (KYI) screening on new and existing clients by documenting and corroborating the information obtained on the client utilizing a variety of independent research sources.

Global Sanctions Lists Global Regulatory & LawEnforcement Lists Expert networks Adverse media searches Extensive reference calls Third Party Research Platform Beneficial owner searches Company registrars

Third-Party Ratings

IAs must meet conditions relating to being fair and balanced as well as needing to have clear and prominent disclosures.

Be a subject matter expert with respect to Broker Dealer compliance, including but not limited to, (a) marketing reviews & updates

New policies & procedures based on amendments (digital, oral, testimonial & endorsement, form adv rule, perform requirements)

Be a subject matter expert with respect to Broker Dealer compliance, including but not limited to,

Notably, Reg BI does not exempt from the definition of "retail customer" high-net-worth natural persons who would be eligible to participate in a private offering. Reg BI also extends to trusts and family offices directed by a nonregulated person and who are currently treated as "institutional Accounts" for purposes of FINRA's suitability rule. It includes a broad definition of the term "retail customer" that extends to natural persons who may have previously been treated as institutional for suitability purposes under FINRA rules.

(11) Advised clients on how to draft, implement, and enforce the firm's Code of Ethics.

Personal account disclosures Outside business activities Rule 204A-1 , amended Rule 204-2(a). RULE 204-1-ASSSOCIATED PERSONS RULE

PLACEMENT AGENTS & REGULATION BEST INTEREST

Placement agents should carefully consider the nature of their relationships in light of the new definition of "retail customer" and specifically relationships with high-net-worth natural persons, trusts, and family offices. These new or revised compliance programs should address, among other things, (i)management of conflicts of interest, (ii) disclosures (including Form CRS), and (iii) training of personnel. constant updates SEC guidance

(13) Assist clients in conducting daily trade surveillance to ensure no MNPI is used or conflicts of interest are present.

Restricted lists disclosures electronic communication monitor compare with COI aware of

Reviewed and drafted corporate contracts and documents for buyers, sellers, and joint venture partners in capital raises,

Reviewed, drafted, maintained, and organized NDAs & other contracts & agreements (1) investor NDAs, (2) investor agreements, employment contracts, service agreements, sales contracts, licensing, contracts, purchase order contracts, leasing agreements, etc.,placement agent agreements,

MARKETING RULE compliance policies & procedures

SEC investigators will be looking for compliance controls with objective and testable means, which may include internal pre-reviewing and approving advertisements, reviewing a sample of advertisements based on risk, or pre-approving templates. → Evaluate all of the firm's marketing materials that will be circulated on or after the Compliance Date. → Provide training on the Marketing Rule to all staff - especially those serving in marketing and investor relations roles. Social media use should be given particular attention to ensure compliance with the Marketing Rule.

Sanctions Screening

Sanctions are tools used by countries or international organizations to impose restrictions on certain activities or relations with specific regions, entities, or individuals. They are typically employed to address threats to national security or international peace, human rights abuses, and prohibit illicit activity. Sanctions can take various forms, such as financial restrictions, trade embargoes, and travel bans.

The fact that the placement agent is engaged by the issuer (and not the customer) is not determinative of whether an investor is a customer for purposes of Reg BI. → Rather, the application of Reg BI depends on the activities of the broker-dealer. (making a rec)

Soliciting natural persons and discussing the terms of an investment appears to fall within the definition of a "recommendation" to retail customers under Reg BI and would trigger Reg BI obligations for placement agents who perform such activities.

MARKETING RULE FORM ADV

The SEC modified Form ADV to include information about advisers' marketing practices. The amended form requires disclosure about whether advertisements include testimonials, endorsements, third-party ratings, or hypothetical or historical performance results. In addition, the Commission amended Form ADV to require advisers to provide additional information regarding their marketing practices.

The following three conditions apply to the use of testimonials and endorsements: Advisor Oversight and Compliance. (A) Reasonable Basis Requirement

The adviser must have a reasonable basis for believing that any testimonial or endorsement complies with the requirements of the Marketing Rule What constitutes a "reasonable basis" depends on the facts and circumstances, but the SEC has stated that an adviser could, for example: (i) periodically make inquiries of a sample of investors solicited or referred by the promoter in order to assess whether that promoter's statements comply with the Marketing Rule; (ii) implement policies and procedures; or (iii) include terms in its written agreement with the promoter to help form a reasonable basis (e.g., permitting the adviser to pre-review or impose limitations on the promoter's statements).

The following three conditions apply to the use of testimonials and endorsements: Advisor Oversight and Compliance. (B) Written Agreement Requirement

The adviser must have a written agreement with any person giving a compensated testimonial or endorsement that describes the scope of the agreed upon activities and the terms of the compensation for those activities → For example, an adviser could satisfy this requirement by entering into a private placement agreement (relating to interests in the private fund) that describes the scope of the solicitation/placement activities and the terms of the compensation.

PLACEMENT AGENT FEES

The placement agent is compensated upon the successful placement of the fund with the investor(s) introduced by the agent. The agent's compensation, around 2% to 2.5%, is typically a percentage of new money raised for the fund.

Sanctions Screening is an Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) control used to detect, prevent, and disrupt financial crime.

This development serves as a stark reminder of the importance of implementing robust Anti-Money Laundering/Know Your Customer (AML/KYC) procedures within law firms. Law firms must take proactive measures to prevent sanctions violations and ensure compliance Apart from the legal and reputational consequences, law firms that fail to comply with sanctions regulations face significant financial losses.

WHAT IS A RECCOMENDATION UNDER REG BI?

Thus, retail customer status, and all of the associated requirements of Reg BI, will depend on whether the person receives a "recommendation."

The following three conditions apply to the use of testimonials and endorsements: (1) TESTIOMONIAL DUE DILLIGENCE RULE:

To use a third-party rating in an advertisement or on a website, the RIA must: Have a reasonable basis to believe that any questionnaire or survey used in the preparation of the third-party rating is structured to make it equally easy for a participant to provide favorable and unfavorable responses and is not designed or prepared to produce any predetermined result

General Partnership

Unlimited number of general partners allowed General Partners are equally liable unless the partnership agreement states otherwise. General Partnership Agreement * Local filings if partnership holds real estate unless the partnership agreement states otherwise, each partner has equal management authority.

KYC/KY INTERMEDIARY DD RULES AS PART OF AML REQUIREMENTS FOR BDs

What are the 4 customer due diligence requirements? (1) Identify and verify the identity of customers. (2) Identify and verify the identity of the beneficial owners of companies. (3) Understand the nature and purpose of customer relationships to develop risk profiles. (4) Conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update information

WHAT IS A RECCOMENDATION UNDER REG BI?

Whether a broker-dealer has made a "recommendation" depends on the facts and circumstances, such as whether the communication may be viewed as (A) a "call to action" or (B) reasonably would influence a natural person to (I) open an account, (II) engage in securities transactions, or (III) investor to engage in a particular transaction or strategy

Be a subject matter expert with respect to Broker Dealer compliance, including but not limited to, Reg BI REQUIREMENTS & ensuring no conflict of interest

a broker must make only those recommendations that are consistent with the customer's best interests prohibits a broker from placing his or her interests ahead of the customer's interests (inc firm incentives)

Reg BI's obligation to act in the retail customer's best interest is satisfied by complying with the rule's four component obligations: (iv) under the Compliance Obligation,

a broker-dealer must establish, maintain and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI, Regular monitoring and audits Code of conduct signatures Compliance audits Testing and monitoring programs Complying with compliance certifications

A "retail customer" for Reg BI purposes is:

a natural person, or the legal representative of such natural person, who: (a)Receives a recommendation of any securities transaction or investment strategy involving securities from a broker, dealer, or a natural person who is an associated person of a broker or dealer; AND (B) Uses the recommendation primarily for personal, family, or household purposes.

Reg BI's obligation to act in the retail customer's best interest is satisfied by complying with the rule's four component obligations: (ii) Care Obligation,

a reasonable basis to believe that each recommendation or series of recommendations made is in the best interest of the particular retail customer and does not place their financial or other interests ahead of the interest of the retail customer.

Rule 2111(b) replaces the previous rule's definition of "institutional customer" with the more common definition of "institutional account" "Institutional account" means the account of a

bank, savings and loan association, insurance company, registered investment company, registered investment adviser or any other person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of at least $50 million.

Framework to appropriately address conflicts of BD

broker-dealers must have policies and procedures in place to ensure that their reps do not engage in excessive and unnecessary transactions. Advisers who charge AUM fees must have policies and procedures in place to ensure they do not neglect the account. → To achieve this, firms must have surveillance mechanisms to identify and curtail recommendations that are the natural result of the business model's conflicts and that are not in the investor's best interest. recommend the type of account that is best for the investor, rather than the type of account that is most profitable for the firm. (I)Levelizing compensation for similar products -DOES NOT DEPEND ON RECOMMENDING ONE PRODUCT OVER THE SAME PRODUCT bc get more money for doing so

MARKETING RULES-TEST & ENDORSE EXEMPTIONS from DISCLOSURE REQUIREMENTS OF these testimonial and endorsement conditions for B-Ds, including: (2) persons who are NOT "Retail Customers" (as defined by REG BI)

is exempt from two of the material Disclosure Requirements: (a) material terms of any compensation arrangement AND (b) material conflicts of interest.

Regulation BI requires disclosure of

of all material facts about the scope and terms of the broker-dealer's relationship with the retail customer, such as: (A) the material fees and costs the customer will incur, (B) as well as all material facts relating to its conflicts of interest associated with the recommendation, including third-party payments and compensation arrangements.

Reg BI's obligation to act in the retail customer's best interest is satisfied by complying with the rule's four component obligations: (i) under the Disclosure Obligation,

prior to or at the time of making a recommendation, a broker-dealer or associated person must make full and fair disclosure to the retail customer of all material facts relating to conflicts of interest that are associated with the recommendation. (A) the material fees and costs the customer will incur, (B) as well as all material facts relating to its conflicts of interest associated with the recommendation, including third-party payments and compensation arrangements.

Reg BI's obligation to act in the retail customer's best interest is satisfied by complying with the rule's four component obligations: (ii) CONFLICT OF INTEREST Obligation,

requires broker-dealers that make recommendations to retail customers to establish, maintain, and enforce written policies and procedures reasonably designed to: (A) identify and at a minimum disclose, or eliminate, all conflicts of interest associated with a recommendation; (B) identify and mitigate (i.e., modify practices to reduce) conflicts of interest at the associated person level; (C)identify and disclose any material limitations placed on the securities or investment strategies involving securities that may be recommended to a retail customer (d) identify and eliminate sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific securities or specific types of securities within a limited period of time

TYPES OF CONFLICTS OF INTERESTS faced by investment firm services involving investment advisors & BDs

revenue sharing, referral fees, trade allocation, personal or family accounts management, and compensation based on specific products. RISKS based on locations of operation ( see sanctions screenings & types of sanctions & restricted bus activity in certain locations, etc.

FINRA rule 2111 suitability requirements to ensure in compliance

that a broker-dealer or associated person "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer's investment profile." (this has been described as a "know your customer/know your product" standard).

PLACEMENT AGENT FEES

the fees paid to a placement agent are calculated as a percentage of the total capital commitments to the fund that were made by investors introduced to the fund by the placement agent. With respect to private equity and venture capital funds, these fees are due only once per investor's commitment.

Does the suitability rule require a broker-dealer to have a hard copy agreement on file reflecting an institutional customer's affirmative indication that it intends to exercise independent judgment?

the suitability rule applies to all recommendations of a security or securities or investment strategies involving a security or securities, but the rule generally allows a firm to take a risk-based approach to documenting suitability. In relation to a customer affirmatively indicating the intention to exercise independent judgment, negative consent will not suffice, but the affirmative indication does not necessarily have to be in writing.

GP AGREEMENT

the way a business is run and details the relationship between each partner. Although each partnership agreement differs based on business objectives, certain terms should be detailed in the document, including (a)percentage of ownership, (b) division of profit and loss, (c)length of the partnership, (d)decision making and resolving disputes, (e)partner authority, and (f)withdrawal or death of a partner