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What does financial crime compliance look like when you're simultaneously regulated by FINRA, the SEC, and Canadian securities commissions?
In this episode of AML Uncovered, Mark is joined by Pat Wood, CEO of Delphx Capital Markets, as they discuss the reality of operating as a highly regulated broker-dealer, the compliance requirements for structured products across traditional and crypto markets, and why early-stage firms must build comprehensive AML programs even before achieving significant transaction volume
Topics covered include:
[00:00] Introduction to Pat Wood and Delphx Capital Markets. Pat shares his 30+ years in capital markets and how Delphx develops downside protection products for bond and crypto markets as a public company and registered broker-dealer.
[03:00] The multi-layered regulatory landscape for broker-dealers. Pat breaks down oversight from FINRA, SEC, BC Securities Commission, and IIROC—explaining why small firms face disproportionate compliance costs when operating across US and Canadian jurisdictions.
[06:00] AML compliance requirements before transaction velocity. Discussion of how broker-dealers must maintain comprehensive compliance programs, qualified principals, and ongoing auditing even in early stages—and why this regulatory burden is both challenging and valuable for building credibility.
[09:00] Risk management as core business philosophy. Pat explains why firms that sell downside protection to clients must embed the same risk management principles internally through robust compliance infrastructure and transparent operations.
[16:00] The evolution of crypto compliance and transparency. Contrary to popular misconception, Pat discusses how crypto has evolved from early "wild west" reputation to become one of the most traceable and transparent asset classes—and why exchanges and structured products now operate under rigorous regulatory frameworks.
[19:00] Developing zero counterparty risk products in crypto markets. Pat shares how Delphx built fully collateralized downside protection using US Treasury bills, creating institutional-grade risk management tools that address concerns about unregulated options markets and unknown counterparties.
[22:00] Technology platforms that reduce compliance burden. Discussion of how automation tools help small firms maintain regulatory standards without diverting all resources away from product development and growth.
[24:00] The cost of quarterly auditing for emerging public companies. Pat advocates for regulatory reform that eases compliance burden on smaller firms while maintaining investor protection—highlighting how current quarterly requirements drain capital from innovation.
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