Compliance News

Compliance Trends Are Worth Watching

There is an investment adage that says “The trend is your friend.” Investment advisers sometimes look at trend activity as part of their analysis of which securities to trade. Compliance trends can also be your friend if a Registered Investment Adviser (“RIA”) is attempting to enhance its compliance program. RIAs should take note of compliance trends to ensure their firms are compliant. A recent Risk Alert from the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) highlighted five compliance topics that were most frequently cited by examiners in deficiency letters sent to RIAs after their examinations.

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OCIE Reveals the Top Five Compliance Topics Found by Examiners

On February 7, 2017, OCIE published a Risk Alert, which lists the five compliance topics that were identified most frequently in deficiency letters sent to RIAs. OCIE’s list was compiled from more than one thousand deficiency letters involving RIAs registered with the Commission. These deficiency letters related to examinations conducted during the previous two years. The problems most frequently encountered by examiners pertained to the compliance topics detailed in this alert.

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RIAs Need to Ensure that Branch Offices Are in Compliance

Oversight of Registered Investment Advisers (“RIAs”) and broker-dealers is a huge undertaking. When the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced its 2017 priorities, the publication noted that OCIE oversees more than 4,000 broker-dealers, including roughly 162,000 branch offices and 640,000 registered representatives. OCIE also oversees more than 12,000 investment advisers with a growing number of branch offices.

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New Year Means FINRA Exam Priority Time

FINRA released last week their annual Examination Priorities Letter for 2017. We put together a brief synopsis for you to get a better understanding of the priorities and what they mean to your Firm and your business. Again this year, Sales Practices dominate their priorities. http://www.finra.org/sites/default/files/2017-regulatory-and-examination-priorities-letter.pdf  

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Latest Guidance on Succession Filings

In November, 2016, the SEC’s Division of Investment Management staff published guidance regarding Registered Investment Adviser (“RIA”) reliance on a predecessor’s registration. The guidance addressed situations where an RIA may be able to rely on the special registration provisions afforded to successors.

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