WEBVTT

00:00.000 --> 00:05.330
Let’s start with the basics of KICS reporting and Broker Import requirements.

00:05.330 --> 00:10.513
Our regulators require that we have a system of quality control in place

00:10.513 --> 00:14.306
that provides reasonable assurance that the firm and its employees do not

00:14.306 --> 00:19.643
lack independence. Specifically, the SEC rules require accounting firms to

00:19.643 --> 00:22.860
have an automated tracking system for investments for our partners

00:22.860 --> 00:24.642
and managerial employees.

00:24.642 --> 00:31.504
Here at KPMG, that system is KICS. Therefore, we all have a responsibility

00:31.504 --> 00:34.921
to maintain an accurate KICS account, as it is an important

00:34.921 --> 00:37.308
element of our system of quality control.

00:37.308 --> 00:43.020
Investments that must be reported in KICS include those that you or

00:43.020 --> 00:46.520
your immediate family members (which include your spouse or spousal

00:46.520 --> 00:50.893
equivalent, and dependents) hold or control, with the exception of investments

00:50.893 --> 00:55.718
held in KPMG-US sponsored plans. Independence applies to a wide

00:55.718 --> 00:58.640
range of investments including those shown here.

00:58.640 --> 01:04.234
Be sure to also consider the types of investments that are often

01:04.234 --> 01:07.744
overlooked when it comes to personal independence such as:

01:07.744 --> 01:11.423
investments held through a variable life or annuity contract,

01:11.423 --> 01:15.587
individual investments within a non-diversified fund that equal

01:15.587 --> 01:18.581
20% or more of the fund’s total investments,

01:18.581 --> 01:23.318
indirect investments, for example, investments held in a partnership

01:23.318 --> 01:25.780
where you are a limited partner without control,

01:25.780 --> 01:28.268
that are material to your net worth, or

01:28.268 --> 01:32.473
investments held in non-KPMG employee benefit plans.

01:32.473 --> 01:36.743
Independence rules apply to these investments and they must be

01:36.743 --> 01:40.070
reported in your KICS account within 14 days of acquisition.

01:40.070 --> 01:45.468
The KICS Broker Import Program facilitates compliance with the firm’s

01:45.468 --> 01:49.786
personal investment reporting policies by automatically updating KICS

01:49.786 --> 01:52.045
with the investments held in activated accounts.

01:52.045 --> 01:56.371
All brokerage accounts that you or your immediate family members

01:56.371 --> 02:00.134
hold (including those held through investing apps) must be with

02:00.134 --> 02:03.990
one of the over 90 brokers that participates in KICS Broker Import.

02:03.990 --> 02:08.642
Each account must be enrolled and activated for KICS Broker Import

02:08.642 --> 02:13.839
within 14 days of opening the account. Remember to enroll and activate:

02:13.839 --> 02:17.369
each individual account with the same brokerage firm,

02:17.369 --> 02:20.213
accounts that have a zero balance, and

02:20.213 --> 02:23.512
new accounts that are opened as a result of changing

02:23.512 --> 02:25.168
brokers or brokerage firms.

02:25.168 --> 02:29.935
Be sure to always check the restriction status of potential investments

02:29.935 --> 02:34.029
before you make any changes to your portfolio. KICS Broker Import

02:34.029 --> 02:37.574
does not block or prevent trades in restricted investments.

02:37.574 --> 02:43.701
In addition to investments, any loans held, co-signed or guaranteed

02:43.701 --> 02:47.178
by you and your immediate family members must be manually

02:47.178 --> 02:50.708
reported in your KICS account. Independence rules apply

02:50.708 --> 02:54.099
to a wide range of loans, including those shown here.

02:54.099 --> 02:58.539
It is important to consider all loans and ability to borrow against

02:58.539 --> 03:02.598
assets that you and your immediate family members have, including:

03:02.598 --> 03:08.100
consumer and point-of-sale loans, for example, for appliances or furniture,

03:08.100 --> 03:12.795
home equity lines of credit on primary and non-primary residences,

03:12.795 --> 03:14.403
even if unused,

03:14.403 --> 03:19.681
brokerage account and digital wallet margin loan features, even if unused, and

03:19.681 --> 03:23.853
overdraft protection on bank accounts not tied to a savings account

03:23.853 --> 03:26.254
or credit card, even if unused.

03:26.254 --> 03:31.888
Each individual loan must be reported in KICS within 14 days of closing

03:31.888 --> 03:35.687
on the loan or obtaining a line of credit or margin loan feature.

03:35.687 --> 03:38.581
Loans must be reported by the name of the lender

03:38.581 --> 03:41.991
(not the loan servicer, which may be a different entity).

03:41.991 --> 03:46.093
Make sure you confirm the name of the lender and update KICS accordingly.

03:46.093 --> 03:49.433
Set a monthly reminder to review your KICS account to help ensure

03:49.433 --> 03:53.911
it’s up to date. If you discover a potential violation, report it to

03:53.911 --> 03:56.195
Risk Management - Independence using the

03:56.195 --> 03:58.336
Independence Inquiry Submission Form.

03:58.336 --> 04:03.461