Compliance Solutions for Investment Advisers

7 Things Advisers Must Do To Avoid Custody

A recent SEC No-Action Letter (Investment Adviser Association, February 21, 2017) clarified how an investment adviser can avoid having custody as a result of having a standing letter of instruction or other similar asset transfer authorization arrangement established by a client with a qualified custodian (SLOA).

3 Ways to Reduce Potential SEC Penalties

One day you might find yourself in a situation where you have discovered – through the normal operation of your compliance policies and procedures or through your compliance testing – that your advisory firm has come up short in some significant manner. Depending on the severity of the problem (i.e., level of client harm) your firm may

SEC Cybersecurity Exam Requests

Cybersecurity seems to be all the rage with both SEC and state regulators. However, advisers have been flying blind as to what the regulators may actually request during a cybersecurity exam. Thanks to our contacts in the industry, we were able to obtain a list of cybersecurity-related information requested by the SEC during a recent exam of

SEC Issues Guidance Re: Inadvertent Custody

Maybe there is something wrong with a rule that needs continual guidance? See the latest SEC Investment Management Guidance:  Inadvertent Custody: Advisory Contract Versus Custodial Contract Authority

3 Most Typical Books & Records Rule Deficiencies

Below are three typical examples of deficiencies or weaknesses with respect to the Books and Records Rule identified by the SEC staff:

The 4 Most Typical Code of Ethics Violations

As stated in the recent SEC Risk Alert, four typical code of ethics violations identified during examinations of investment advisers include:

Top 3 Custody Deficiencies

As stated in the recent SEC Risk Alert, the 3 most frequent custody issues identified in examinations of investment advisers are as follows:

Top 4 Regulatory Filing Deficiencies

As stated in the recent SEC Risk Alert, the 4 most frequent regulatory filing issues identified in examinations of investment advisers are as follows:

Top 4 Compliance Program Deficiencies

As stated in the recent SEC Risk Alert, the 4 most frequent compliance issues identified in examinations of investment advisers are as follows:

5 Most Frequent Compliance Topics Identified in Investment Adviser Exams

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) identified the following five areas of compliance deficiencies or weaknesses frequently found during its staff’s examinations of SEC-registered investment advisers:

SEC 2017 Examination Priorities

The SEC’s Office of Compliance Inspections and Examinations has published its examination priorities for 2017. The priorities focus on electronic investment advice, money market funds, and financial exploitation of senior investors. In addition, the priorities “reflect a continuing focus on protecting retail investors, including individuals investing for their retirement, and assessing market-wide risks.” Click here for a

Last Day to File Annual Amendment

Because this year is a Leap Year, the deadline for filing your annual amendment is March 30th and not the usual March 31st. Also, once you are done with your annual amendment filing, you still have one additional “ADV” obligation . . .  Each year you must (i) deliver, within 120 days of the end

Way to Go CCO Companion!

Congratulations to the team at Digital Compliance and the launch of their very first compliance app – CCO Companion. We are proud to be the sole content provider for all of CCO Companion’s original compliance material. We believe, and from early indications the compliance profession does as well, that CCO Companion is a revolutionary step forward

Common Compliance Deficiencies – Weak Internal Controls

With the SEC’s greater emphasis on risk-based exams, SEC examiners’ primary focus is on an adviser’s controls and procedures. As such, they will perform an evaluation of the effectiveness of those controls. Where those controls are found to be weak and ineffective, or worse yet, non-existent, the adviser will be considered high-risk, and will have more frequent and in-depth

Common Compliance Deficiencies – Failure to Disclose

An investment adviser has a fiduciary duty to act in the best interests of its clients. A central tenant of this duty is full and fair disclosure of all material facts to clients. What you tell your clients about your business – and whether you conduct your business consistent with the disclosures you make to

Social Media – Monitoring

Investment advisers must be able to monitor what their supervised persons are saying about the firm in their social media posts and should be able to monitor what others are saying about the advisory firm.

Social Media – Mobile Devices

Since most social media activity occurs off-site and through mobile phones, advisory firms need to have the capability of applying all their social media policies and procedures to mobile devices.

Social Media – Capture

Advisory firms must be able to capture and archive the posts and tweets of their supervised persons. Firm’s also need to be able to conduct a key word search for problematic terms.

Social Media – Disclaimers

Social media posts are advertising. Any disclaimer that you would typically place on your advisory firm’s web site should also accompany any social media posts. Since the nature of social media is to allow third-parties to post comments, it is also prudent to include disclaimers about statements that are outside your firm’s control.

Social Media – Policies & Procedures

Among top five social media issues for advisers  . . . Written Policies & Procedures Advisory firms must develop a written policy and attendant procedures that outlines, at the very least: The types of social media platforms (e.g., Twitter, Linkedin, Facebook, blogs, podcasts, etc.) its adviser representatives may use; Those adviser representatives (and other employees) that