SEC Compliance Solutions RIA Compliance Blog

Compliant Advertising – Breaking It Down (Again) Part 5: Everything Else (Third Party Ratings, ADV, B&R, No-Action Letters, Next Steps)

10 January 2022

Background At this point we have covered The Definition of an Advertisement, where we summarize the amended Marketing Rule’s definitions of an advertisement; specifically the elements covered under Prong 1 and Prong 2 of the definition. We follow this with part two of our series, which focuses on the General Prohibitions and what they meanRead More »

Principal, Agency, and Internal Cross Transactions, Oh My!

10 December 2021

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM CEO & Lead Consultant Background Before you read the title and stop because you don’t think this applies to you, keep in mind that claiming NOT to engage in the aforementioned practices, is one of the issues the SEC has found in examinations. If it is your policyRead More »

SEC Risk Alert: Wrap Fee Programs

01 November 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant Introduction On July 21, 2021, the SEC released a Risk Alert focusing on examinations of wrap sponsors and wrap advisors. After examining over 100 advisors associated with wrap programs, the SEC found compliance concerns and identified areas where advisors needed to make improvements. The focusRead More »

Continuing Education Requirements For Investment Advisor Representatives

19 October 2021

Main Contributor: Zachary Fenno, CSCP, Compliance Manager In November 2020 the North American Securities Administrators Association (“NASAA”) adopted a Model Rule, setting guideline requirements for investment advisor representatives (“IARs”) registered with investment advisory firms to complete continuing education requirements in order to maintain licenses in jurisdictions that adopt the rule. This will apply to bothRead More »

Compliant Advertising – Breaking It Down (Again) Part 4: Performance

30 September 2021

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM CEO & Lead Consultant Background Did you know the old Advertising Rule NEVER addressed performance advertising and for years advisers relied primarily on the Clover no-action letter, which was drafted in 1986? The addition of requirements around performance advertising in the updated Marketing Rule is a necessary addition,Read More »

Compliant Advertising – Breaking It Down (Again) Part 3: Testimonials and Endorsements

31 August 2021

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM CEO & Lead Consultant This is the third article in our series to breakdown the updated Marketing Rule. If you have not been following us, we highly suggest you start with the first in our series, The Definition of an Advertisement, where we summarized the amended Marketing Rule’s definitionsRead More »

Form D and Blue Sky Filings

05 August 2021

Main Contributor: Zachary Fenno, CSCP, Compliance Manager Introduction Private fund advisors have unique filing requirements, such as Form D, and Blue Sky Filings. In this article we are going to explain the two filings and the two exemptions commonly used by private fund advisors. Purpose of Form D and Blue Sky The Form D providesRead More »

Form CRS: Ongoing Obligations

21 July 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant The one-year anniversary of Form CRS has come and gone, yet there are still questions about delivery requirements and annual updates. First and foremost, there is NO annual update requirement. However, there are a few important triggers with re-filing your Form CRS, as well asRead More »

ESG Investing Risks & Compliance Implications

02 July 2021

Main Contributor: Gretchen Sturdivan, Creative Director & Client Service Manager Approaching Sustainability The SEC Division of Examinations published a Risk Alert on April 9, 2021, as a result of their exam findings with firms who offer Environmental, Social, Governance (“ESG”) products and services. ESG investing has been an Examination Priority for the SEC for theRead More »

Compliant Advertising – Breaking It Down (Again) Part 2: General Prohibitions

02 June 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant Background This article follows the first in our series, The Definition of an Advertisement, where we summarized the amended Marketing Rule’s definitions of an advertisement; specifically the elements covered under Prong 1 and Prong 2 of the definition. Part Two of our series will focusRead More »

2021 Exam Priorities: Discussion for Registered Investment Advisors

06 April 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant We finally have the 2021 Examination Priorities (“Priorities”) from the SEC, albeit later than previous years. You can read the release here. The Priorities for 2021 are strikingly similar to those of previous years, as noted below: Retail Investors, Including Seniors and Individuals SavingRead More »

Compliant Advertising – Breaking It Down (Again) Part 1: The Definition of an Advertisement

01 March 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant Background The SEC proposed and adopted the new Marketing Rule, (the “Rule”) which will eventually replace the current Advertising Rule (Rule 206(4)-1, originally adopted in 1961) and the Solicitation Rule (Rule 206(4)-3, originally adopted in 1979). The Rule is a complete rewrite of theRead More »

SEC Risk Alert Large Trader Obligations (Form 13H)

26 January 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant On December 16, 2020 the SEC released a risk alert addressing observations from examinations for adviser’s compliance with Rule 13h-1, also known as the Large Trader Rule.. This article will cover investment advisers’ obligations under Rule 13h-1 and helpful guidance to make it easier.Read More »

2021 RIA Compliance Calendar & Filing Deadlines

05 January 2021

Don’t miss a compliance deadline this year! We have put together a calendar to help you keep track of regulatory filing deadlines for 2021. You might want to bookmark this one and also make sure you are on our deadline reminder list! 2021 SEC Regulatory Deadlines for Investment Advisers The filing deadlines are listedRead More »

OCIE Observations: Compliance Programs

04 January 2021

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant The SEC Risk Alerts keep coming, this time with exam observations regarding investment advisors’ Compliance Programs. According to OCIE, the most common exam deficiencies arise from issues with Rule 206-4(7), known as “the Compliance Rule.” Rule 206(4)-7 requires investment advisors to have policies andRead More »

New York State Now Requires Investment Advisor Representatives to Register

17 December 2020

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant Effective February 1, 2021, New York state will require Investment Advisor Representatives (“IARs”) to register with the state via the CRS/IARD system. You can read the updated NY regulation here. Historically, New York has been one of the few states to not require IARsRead More »

OCIE: Exam Observations

04 December 2020

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant The SEC has blessed us once again with another Risk Alert. This time, they are providing us with a summary of their findings from a series of focused exams of advisors with branch offices. We intentionally left out the term “branch office” in theRead More »

SEC Risk Alert: Safeguarding Against Credential Compromise

30 October 2020

Main Contributor: Gretchen Sturdivan, Creative Director & Client Service Manager On September 15th, the SEC issued a Risk Alert to address a method of cyber-attack that is more sophisticated yet increasingly accessible to attackers: “credential stuffing.” We’re getting close to Thanksgiving, but that’s not the direction the SEC is going. This method of cyber-attackRead More »

SEC Amendments to the Accredited Investor Definition

24 September 2020

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant In August of this year, the SEC released an amendment to the “accredited investor” definition. What is an Accredited Investor? Certain qualifications must be met in order to invest in private placements or private funds. One qualification is being an “accredited investor.” An accreditedRead More »

COVID-19 Compliance Risks and Considerations for Investment Advisers

01 September 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant On August 12th the SEC issued a Risk Alert outlining observations from exams and risks in light of the COVID-19 work from home environment. The Commission outlined six (6) areas of concern for firms to review and adjust policies and procedures as necessary,Read More »

SEC’s Ransomware Alert

04 August 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant On July 10th the SEC issued a risk alert focusing on ransomware and the importance of generating awareness within advisory firms of current threats. The SEC is encouraging registrants to monitor alerts provided by the Department of Homeland Security Cybersecurity and Infrastructure SecurityRead More »

SEC Proposed Changes on 13F

19 July 2020

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant On July 10th, the SEC released a proposal to amend reporting requirements of Form 13F to update the reporting threshold which has not been adjusted in over 40 years. What is 13F? Section 13F of the Securities and Exchange Act requires registered investment advisersRead More »

Exam Findings for Private Funds

06 July 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant The SEC issued a risk alert on June 23rd that provides a summary of the results the staff discovered when conducting exams of investment advisors that manage private funds. If you are an advisor to private funds (all types including private equity) orRead More »

Compliance During the Pandemic

02 June 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant We have settled into work from home life and found a (somewhat) new normal of work during the pandemic. When the dust settles, we expect the SEC to focus on areas such as business continuity and supervision of employees during the pandemic. WeRead More »

SEC Risk Alert: Form CRS

08 May 2020

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant SEC Risk Alert: Form CRS On April 7, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) issued a risk alert to let advisors and broker-dealers know that, regardless of COVID-19, it’s business as usual at the SEC and firms must continue to meetRead More »

How are you Handling the Pandemic?

23 March 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant It didn’t take long for advisors to start receiving requests from underlying managers, investors and even the SEC on how they were responding to the pandemic. Areas being addressed, include, but are not limited to: A copy of your firm’s Business Continuity PlanRead More »

Compliant Advertising: Breaking it Down – Part 4: Performance

06 March 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant Review of Part 1: The Foundation In the first article of this series, we discussed the foundational information you need to know to ensure your marketing and advertising materials are in compliance with the SEC’s rules and regulations. We helped you clearly understand:Read More »

2020 SEC Exam Priorities

29 January 2020

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant I can’t think of a better way to start off the year than by reading the SEC’s Exam Priorities for 2020. Okay, I’m being a bit facetious. But in all honesty, I do look forward to this publication. It is a great compliance toolRead More »

New SEC Disclosure Form

03 January 2020

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant Have you heard? There is a new form in town. It goes by many names…it is referred to as the Client Relationship Form, Form CRS, or even ADV Part 3. The intent of this new form is to provide your Retail Investors withRead More »

2020 RIA Compliance Calendar & Filing Deadlines

19 December 2019

The purpose of this compliance calendar is to help you keep track of regulatory filing deadlines for 2020. To receive reminders, make sure you join our mailing list! 2020 SEC Regulatory Deadlines for Investment Advisers The filing deadlines are listed below in chronological order, with additional details of RIA form and filing obligations toward the end.Read More »

Compliant Advertising: Breaking it Down – Part 3: Past Specific Recommendations

27 November 2019

SEC Proxy Voting Guidance

27 November 2019

Main Contributor: Katie Mogan, IACCP® Vice President, Senior Compliance Consultant After years of research, OCIE exam findings, and roundtable discussions, the SEC has issued guidance on proxy voting in the form of a Question and Response (“Q&R”). You can find the Q&R guidance here. The responsibilities of proxy voting can be an administrative burdenRead More »

Compliant Advertising: Breaking it Down – Part 2: Testimonials

25 October 2019

Risk Alert: Employee Supervision and Employing Personnel with Disciplinary Events

28 August 2019

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant As part of the SEC’s focus on protecting retail investors, in 2017, they examined over 50 RIAs to assess the supervisory practices of advisers who (at the time) currently or previously employed personnel with a history of disciplinary events (the “Supervision Initiative”). NearlyRead More »

Risk Alert: Common Reg S-P Deficiencies

22 July 2019

Once again, the SEC has provided insight into exam deficiencies. This time, it’s regarding Reg S-P. Reg S-P requires, among other things, that registered investment advisers: provide customers with a copy of the Firm’s Privacy Notice initially and annually, if there are changes; provide customers with an option to opt out of personal informationRead More »

Risk Alert: Use of Third Parties for Network Storage

02 July 2019

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant As a reminder, a “Risk Alert” is the SEC’s way of giving you a heads up about patterns of deficiencies during recent examinations. They can help you stay on top of your game. On May 23, 2019, the SEC issued a risk alertRead More »

Key Take-Aways from Recent Industry Conferences: Senior Investors & Private Funds

08 May 2019

We wanted to share with you the common themes we’ve observed among the recent industry conferences we attended. Let us know if we can help you with any of these topics. Senior Investors It was discussed that the SEC views senior investors as the most vulnerable investor group and considers it the investment advisers’Read More »

Compliant Advertising: Breaking it Down – Part 1: The Foundation

29 April 2019

Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant The topic of Advertising is one of the most challenging areas for CCOs. The challenge begins with the SEC’s definition of “advertisement.” It’s confusing and outdated. The way that the rule is written makes you feel like you have to run through aRead More »

5 Tips to Simplify a CCO’s Heavy Workload

03 April 2019

In all of my experience, working with CCOs as a compliance consultant, the one common sentiment they share is overwhelm. Especially those who wear multiple hats (which is most of the CCOs I work with). If that’s you, you probably ask yourself, “How do I fit all of this in?!” In first quarter,Read More »

Overcoming the Challenges of SEC Compliance around Electronic Messaging

01 March 2019

Did you see the SEC’s Risk Alert on Electronic Messaging? We did! And let us start by saying, this Risk Alert was actually really helpful! A lot of times, the SEC issues Risk Alerts that tell you the issues they’re seeing in recent SEC examinations and remind you of your compliance obligations, but theyRead More »

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