Compliance Rule Deficiencies Identified by The SEC

The SEC’s Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert on November 19, 2020, identifying deficiencies with advisers’ compliance programs that they observed from recent adviser exams. The Risk Alert summarized six main areas where advisers were not complying with Rule 206(4)-7 (the “Compliance Rule”) under the Investment Advisers Act of 1940 (“Advisers Act”); These categories included:

  • Inadequate compliance resources;
  • Insufficient authority of CCOs;
  • Annual review deficiencies;
  • Implementing actions required by written policies and procedures;
  • Maintaining accurate and complete information in policies and procedures; and
  • Maintaining or establishing reasonably designed written policies and procedures.

In response to these observations, the OCIE recommended advisers to,” review their written policies and procedures, including implementation of those policies and procedures, to ensure that they are tailored to the advisers’ business and adequately reviewed and implemented.”

Learn more about how SDDco can help strengthen your firm’s Investment Adviser compliance program.

Think Advisor – SEC: Compliance Officers Need More Authority

SEC Risk Alert – November 19, 2020