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The weekly news source for investment management legal and compliance professionals

Topic: Compliance Programs and CCOs

Check on Disclosure Across All Firm/Client Interactions

April 14, 2017
Thereís no doubt that disclosure is a major issue for the SEC Ė so much so that the agency is often referred to, perhaps somewhat inaccurately, as a "disclosure agency." Smart chief compliance officers would therefore be wise to monitor and enforce disclosure requirements horizontally across all areas where firm actions affect their clients.

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Electronic Communication Reviews Must Keep Up with Technology

March 31, 2017
Advisory firms need to stay up to date with technology when it comes to reviewing electronic communications. Gone are the days when email monitoring was considered cutting edge. Chief compliance officers that want to be effective today need to review communications sent by text messaging, on social media and on emerging electronic platforms, including apps.

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Advisory Firm Executives Optimistic About the Near Future

March 17, 2017
Itís good to be an investment advisory firm executive these days. The sun is bright, the sky is blue and the road ahead, while containing some hazards, looks relatively clear. That, at least, is one conclusion that can be drawn from the results of a survey of such executives released this month by the Investment Adviser Association.

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OCIE Identifies Top 5 Compliance Problem Areas Found in Exams

February 10, 2017
Advisers receiving a deficiency letter after an examination identifying certain compliance areas where the SEC found them lacking may take some comfort in knowing they are not alone Ė particularly if those areas involve the Compliance Program Rule, required regulatory filings, the Custody Rule, the Code of Ethics Rule or the Books and Records Rule. The agencyís Office of Compliance Inspections and Examinations on February 7 issued a Risk Alert, "The Five Most Frequent Compliance Topics Identified in OCIE Examinations of Investment Advisers."

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Keep Your Compliance Program Alive and Breathing

January 27, 2017
Many firms roll out formal changes to their Compliance Manual and Code of Ethics at the beginning of the year, often followed by employee compliance training. Firms may also distribute and collect questionnaires related to potential conflicts of interest, as well as an attestation of employeesí understanding of and compliance with the firmís policies. Compliance programs should be reviewed and updated regularly.

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Meet These 2017 Regulatory Deadlines

January 20, 2017
Itís January and that means another year of potential to excel, increase returns, and be all you can be. Along with that, the start of 2017 means another year of meeting SEC and other applicable regulatory deadlines.

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Required Third-Party Compliance Assessments Not Likely

January 6, 2017
Donít expect an SEC rule requiring third-party compliance assessments any time soon. Outgoing SEC chair Mary Jo White, in a recent letter to two Senate chairmen, put the kibosh on such a rule being pushed through in the remaining days of her term.

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Branch Office Examinations: What OCIE Wants to Know

December 30, 2016
When the SECís Office of Compliance Inspections and Examinations listed branch offices in its 2016 target list last January, it didnít put much meat on the bones as to what examiners would be looking for, other than to say that they would "review regulated entitiesí supervision of registered representatives and investment adviser representatives." A recent Guidance Alert from OCIE now spells out what advisory firms can expect.

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2016 in Review: Enforcement, New Rules and Cybersecurity

December 16, 2016
A lot happened in 2016, but the question hovers like a cloud over the asset management industry: Will Donald Trump change all that?

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How to Give Testimony in an SEC Investigation: Preparation is Key

November 11, 2016
Yes, the time has come that you, the chief compliance officer, have dreaded. You and others have been called to provide testimony to the SEC as part of an investigation into suspected fraud at your firm. Are you ready?

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DOL Clarifies Fiduciary Rule Exemption Requirements

November 4, 2016
Now we begin to find out what the Department of Laborís Fiduciary Rule and the related Best Interest Contract Exemption really mean. The DOL, more than six months after issuing the Rule and the BIC Exemption for institutions providing retirement investment advice, on October 27 issued the first of what may be multiple rounds of answers to frequently asked questions.

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Hiring a Cybersecurity Czar: How to Do It, What to Look For

November 4, 2016
No one wants to have their data, not to mention sensitive client information, misused or stolen. Advisory firms may already have some IT staff on board, but as cybercrimes become increasingly sophisticated and regulatory requirements increase, they may want to bring on board an individual to oversee everything cybersecurity, in other words, a cybersecurity czar.

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Donohue: More Skills Needed to Meet Future Compliance Challenges

October 28, 2016
There is a future for advisory firm compliance officers, but according to SEC chief of staff Andrew "Buddy" Donohue, it will be one requiring a greater variety of skills to address a greater variety of business and technological challenges. Proceed with both eyes wide open.

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SEC: Inadequate Compliance Resources Led to Enforcement Action

September 30, 2016
Your compliance departmentís budget may be limited and its staff overworked, but do not fall into the trap of letting firm traders seek advice from low-level or otherwise uninformed compliance staff. The result may be trouble with the SEC, as one firm found out.

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Top Cybersecurity Mistakes Made by Investment Advisers

August 12, 2016
Investment advisers nationwide rate cybersecurity as the number one issue they face. The SEC has made it a top priority and is taking enforcement actions against firms that it finds are not properly addressing cyber risks. The upshot of all this is that advisory firms are increasingly taking steps to safeguard the privacy of client and business records, as well as the security of firm assets. But a key question they need to ask is: Are those steps the correct ones?

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15 Compliance Officer Tips and More from the SEC Chief of Staff

June 24, 2016
Thereís no substitute for experience. So when SEC chief of staff Andrew "Buddy" Donohue recently shared practical advice from his approximately 40 years in compliance with students at Rutgers Law School, the smart ones surely sat up and took notice.

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Some Consultants May Need to Be Treated as Access Persons

June 3, 2016
Your compliance policies and procedures may set restrictions on employees with access to certain confidential or proprietary information. But do those limitations also cover outside consultants?

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

May 13, 2016
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 firmís business model and culture, assuming they promote compliance, will Ė and should Ė have a role in how you train them.

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Failure to Supervise Chief Compliance Officer Leads to Loss of SEC Registration

May 6, 2016
If only they had properly supervised the chief compliance officerÖThen $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 firmís investment adviser registration might not have been revoked. Unfortunately, thatís not the way it played out.

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The General Ledger: When to Review and What to Look For

April 22, 2016
Itís common practice for compliance departments to look into the activities of the portfolio manager and the trading desk, the marketing department, investment account representatives and more. But when and how should compliance officers look into the firmís general ledger?

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