Compliance with federal and state securities laws has always been a critical aspect of an RIA’s business. Without an effective compliance program, your clients’ assets may be at risk, and your firm risks being shuttered by the regulators.
The late trading, market timing, and disclosure-related scandals that rocked the mutual fund industry starting in 2003 heightened the focus and resolve of state and federal regulators to ensure that investment advisors were compliant with the rules and regulations.
One sweeping change to the industry was implemented with the adoption of Rule 206(4)-7 of the Investment Advisers Act of 1940. Prior to that Rule, RIAs certainly needed to be compliant with federal and state securities laws. Starting that October, the RIA was required to document, in writing, the policies and procedures that would keep them in compliance. They were also required for the first time to perform an annual assessment of the adequacy and effectiveness of the policies and procedures. Finally, they were required to appoint a Chief Compliance Officer who would be responsible for the administration of those policies and procedures.
The annual assessment of adequacy means looking at the policies and procedures to make sure they still fit the nature of the business you are conducting. Have you changed the way you are doing business? Have you outsourced some of your operations to a third party provider? Have changes to the rules and regulations been incorporated into your policies and procedures?
The annual review of effectiveness means testing the implementation of the policies and procedures to ensure that employees, outsourced service providers, and any other person or entity involved in conducting your business are doing so in accordance with your compliance program.
At AdvisorAssist, our experienced industry professionals have designed compliance programs customized to our clients’ businesses. We also assist CCOs in meeting their requirements for the annual assessment of the design and effectiveness of the program.
If you would like to learn how we can help with the design or testing of your compliance program, contact one of our principals by filling out the form to the right or calling us at 866.513.4042.
Request Information
For more information and pricing, please complete the form below or call us at 866-513-4042.