The Securities and Exchange Commission (SEC) solicits transaction information from financial institutions and trading firms using “blue sheets.” This data will aid in the openness of banking and commerce, as well as the identification of fraud.
What Is A Blue Sheet?
The SEC issues blue sheets, or formal requests for information, to market makers, broker-dealers, and/or clearinghouses. A blue sheet may request information about a specific security or transaction that may have influenced the price of that security.
Blue sheet requests are common when attempting to track down the source of unusual market activity or investigating potential illegal activities. Blue sheets, like many other trade needs, have gone electronic.
Understanding Blue Sheets
The term “blue sheets” stuck because the SEC’s surveys and requests for information were always printed on blue paper.
The SEC receives a wide range of data through blue sheets. Account statements are intended to detail the business relationship between the firm and its customers, including the nature of the account holder’s investments and the nature of the company’s trades.
- The name of the security
- The date and price of the trade
- The size of the transaction
- A list of the counterparties involved
The goal is to give authorities the tools they need to investigate a company’s trading patterns. Regulators’ ability to detect cases of fraud and insider trading is hampered if information is insufficient, out of date, or otherwise incorrect.
Blue sheet information is used by the Financial Industry Regulatory Authority’s (FINRA) Office of Fraud Detection and Market Intelligence to identify and investigate suspicious trades that may be the result of insider knowledge.
Brokers and clearinghouses, like banks, invest in data management and filing. Employees may be held up while data is collected.
Structures that will allow us to collect data more effectively must be put in place. The additional expense may be regarded as a burden, similar to the burden imposed by other compliance-related procedures.
Each level of sophistication added to blue sheet information gathering improves transparency in banking and trading. If the information contained in blue sheets is up to date and correct, it can help speed up fraud investigations.
When authorities examine data from blue sheets, an in-depth investigation of unusual trading activity may be triggered, necessitating additional paperwork from banks and other financial institutions.
When blue sheets notice something out of the ordinary, they may launch an investigation that requires financial institutions to disclose records and detailed reporting.
What Does A Blue Sheet Can Do?
This type of paperwork was actually transmitted on blue sheets until the late 1980s. Companies began converting to electronic blue sheets following the implementation of electronic filing procedures, and this trend continues to this day.
Electronic filings are instantly received by the SEC and are compatible with its systems, allowing them to be conveniently stored and cross-referenced with other filings and filings from other businesses. This enables timely and exact communication.
The company publishes the names of the securities it trades with on the blue sheet, as well as the dates and prices at which those assets were exchanged. The volume of each transaction must be declared in addition to the identity of the parties involved and the money traded.
This information should already be in the clearing firm’s records; if it isn’t, it’s a red flag indicating there is a managerial or procedural issue at the clearing firm that prevents it from keeping correct records and keeping track of transactions.
By evaluating a “blue sheet,” the SEC can search for suspicious conduct or unexpected transactions. It can be cross-referenced with other public papers to ensure that reported transactions are accurate. If something about the transaction raises concerns, SEC officials may initiate an investigation to learn more about it and the parties involved.
A clearing firm’s blue sheet, for example, might include evidence of insider trading or other illicit trading operations.
History Of Blue Sheet
Have you ever wondered where the name “Blue Sheet” came from? When Bob Miller was putting out the original set of paperwork to accompany the Strategic Selling framework, the printer apparently ran out of 11 x 17 white paper.
When Bob ran out of white paper, he had to settle for blue since he couldn’t afford to wait for more. When customers began referring to it as the “blue sheet,” a cultural phenomenon was born.
The Blue Sheet is difficult to read on any other color of paper, but Bob’s taste has nothing to do with the publication’s success.
Miller Heiman’s Blue Sheet, which was initially published in 1978, was a game changer for the sales industry since it provided salespeople with a dependable set of instructions for adopting the revolutionary Strategic Selling method.
Prior to the Blue Sheet, salespeople stumbled through the sales process, making informed assumptions about the influencers, competitors, actions, and other elements that dictated the success or failure of high-value offerings.
When it came to capitalizing on these opportunities, the Blue Sheet presented sellers with a formal strategic analytical instrument. It also aligned sales operations with technique, increasing sales teams’ ability to handle and close tough deals on a regular basis.
As more firms recognized the importance of the Strategic Selling method, the Blue Sheet soon became a common tool for top-performing sales teams all around the world.
A new Blue Sheet for a changing marketplace
The following adjustments and additions to the Blue Sheet were made:
- Customer’s Stated Objective: The language a customer employs to express his or her desire to avoid danger, resolve an issue, or capitalize on an opportunity.
- Evaluation of Objective: Analyzing the customer’s stated goal in order to locate opportunities to provide value and insight that go above and beyond the customer’s expectations.
- Opportunity Scorecard:A user-friendly handbook that outlines the criteria that will determine success and the tactical measures suppliers must take to achieve it..
- Competitive Preference (by Buying Influence): Capability to see opposing desires at the individual Buying Influence level rather than the corporate level.
- Providing Perspective to Whom: Information or insight that helps a client grasp a business dilemma or issues.
- Win-Results: .A dotted line has been drawn along the middle of the Blue Sheet to demonstrate the link between organizational performance and individual achievement.
Blue Sheet Nowadays
We’ve integrated the Blue Sheet with Korn Ferry Sell, our new cloud-based sales analytics product available on the Salesforce AppExchange, to better support modern sales teams.
It enables sales managers to monitor how their teams are going, indicates where their team members’ efforts should be directed, and outlines the activities that will expedite and finalize deals.
Korn Ferry Sell is now accessible on the AppExchange, allowing enterprises to immediately start delivering value to their sales teams. According to our findings, putting analytics into a formal sales process increases win rates by 13%.
In contrast to customer relationship management software, which is commonly viewed as an administrative burden rather than a valuable selling resource, Korn Ferry Sell increases Blue Sheet adoption rates and provides salespeople with the opportunity to leverage sales technology to improve sales outcomes.
When it comes to Korn Ferry, the Blue Sheet is a must-have. Furthermore, technology improvements have resulted in a fundamental shift in the way sales teams obtain access to information, opening up various new choices.
At its heart, though, is the tried-and-true Blue Sheet, which has been a fixture of elite sales teams throughout the world for decades.
Previously, blue sheets were supplied by a hard copy method that entailed shipping out actual copies. By the 1980s, however, things had changed. Blue sheet data may now be accessed online thanks to electronic blue sheet systems (EBS).
The switch to electronic exchanges resulted in a substantial rise in trade volume, which forced the move. Furthermore, an increasing number of professionals and companies are trading securities through several broker-dealer accounts.
It is advisable to send and receive blue sheet requests online in order to accelerate the review and closure of files.
FINRA sends out blue sheet requests through email, and each request has a due date established by the regulator. If the firm does not receive the request, FINRA will record it on its system.
After conducting an in-depth investigation, businesses with nothing to report are required to send a confirmation email. Blue papers that are blank or otherwise unfilled will not be accepted by FINRA.
Failure to Comply
Businesses may suffer sanctions if they fail to respond to information requests or submit information that is later considered to be insufficient.
The Securities and Exchange Commission (SEC) has the authority to assess fines against individuals who are at fault. Penalties might range from extremely little to quite severe, depending on the nature of the offence.
Several large banks have been fined for failing to give the SEC with the precise information required on “blue sheets” on multiple occasions.
Citigroup paid $7 million in fines in 2016 due to insufficient blue sheet information on transactions done by its clients, while Credit Suisse Securities paid $4.25 million in fines in 2015.
A “blue sheet” is a clearing firm’s report to the Securities and Exchange Commission (SEC). The SEC demands these papers and utilizes them, along with information from other regulatory agencies, to monitor trade activities.
Failure to send a blue sheet upon request can be grounds for legal penalties, as firms involved in the financial markets are expected to comply with regulatory rulings designed to facilitate monitoring, regulation, and investor safety.