Common TPRM Questions for Smaller Broker-Dealers

For broker-dealers, TPRM is a regulatory expectation under FINRA, not just a best practice. FINRA's position is that while firms can outsource a product or service, they cannot outsource the responsibility for it. 

For smaller broker-dealers just getting started with third-party risk management, that expectation can feel like a lot — especially with limited staff and resources and a long list of unfamiliar terms to work through.

This infographic cuts through the complexity. It answers the questions smaller broker-dealer firms ask most often about TPRM, from what the vendor lifecycle actually looks like to how to determine which vendors are critical and which fall outside your program's scope.

You'll learn the answers to questions like:

• What is a third-party vendor?
• What is the difference between a third-party and a fourth-party vendor? 
• What does the TPRM lifecycle look like for a broker-dealer?
• What is a critical vendor, and how do I identify one? 
• Do all vendors need to go through the TPRM process? 

This Ncontracts' infographic answers the questions smaller broker-dealer firms ask most often about third-party risk management, including how the FINRA-suggested lifecycle works, how to classify vendors by risk level, and what oversight looks like in practice.