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The weekly news source for investment management legal and compliance professionals

An Effective Cybersecurity Response Plan: Your Best Protection

When the cyber event occurs, you don’t want to be caught unprepared. The best way to be ready for any cybersecurity threat is to have an effective cybersecurity response plan in place, one that offers clear, plain-English instructions for how to handle events when they occur, yet that is flexible enough to adapt to different types of threats.
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Proposed Incentive-Based Compensation Rule: Advisers Should Pay Attention

The proposed rule issued May 6 by the SEC and five other federal agencies that would prohibit financial institutions from offering incentive-based compensation encouraging inappropriate risk taking should be viewed with concern by at least large investment advisers. While the rule would affect only advisers with more than $1 billion in assets, the way the SEC counts such advisers may mean that some firms that believe they are under the threshold may actually fall within it.
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Recent Stories

Train New Compliance Staff With Your Firm’s Business and Culture in Mind

Mid-sized and larger firms with more than the chief compliance officer comprising the compliance department will, from time to time, bring new compliance employees on board. Some will have experience at other advisory firms, others may not. Either way, your firm’s business model and culture, assuming they promote compliance, will – and should – have a role in how you train them.
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SEC Use of Administrative Proceedings Declines, But are New Numbers a Blip?

The SEC’s controversial increased use of administrative proceedings appears to have been thrown into reverse gear during the six months from October 2015 through March of this year, with "new matters" before administrative law judges declining 17.4 percent from the previous six months. That compares to an increase of 40.4 percent in the six months from April 2015 through September from the six months before that.
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Failure to Supervise Chief Compliance Officer Leads to Loss of SEC Registration

If only they had properly supervised the chief compliance officer…Then $840,000 in client funds might not have been allegedly misappropriated by the CCO, the adviser might not have had to endure multiple enforcement actions, the advisory firm owners might have avoided civil money penalties, and the firm’s investment adviser registration might not have been revoked. Unfortunately, that’s not the way it played out.
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