The SEC issued a risk alert today that provided an overview of notable compliance issues identified by examination staff of OCIE (Office of Compliance Inspections and Examinations) with regard to Rule 206(4)-7 (the “Compliance Rule”) of the Advisers Act. This rule requires advisers to adopt and implement written policies and procedures that are reasonably designed to prevent violations of the Advisers Act and the rules thereunder by the adviser and its supervised persons.
Notable Deficiencies and Weaknesses Regarding the Compliance Rule
Notable deficiencies or weaknesses identified by OCIE staff with regard to the Compliance Rule included the following:
- Inadequate compliance resources
- Insufficient authority of CCO
- Annual review of compliance program
- Failure to implement actions required by written policies and procedures
- Failure to maintain accurate and complete information in policies and procedures
- Failure to maintain or establish reasonably designed written policies and procedures
Click here to see the complete Risk Alert from OCIE and more specific information regarding the deficiencies and weaknesses that were found.
For more information about how your firm can improve its compliance with the Compliance Rule, please contact NCA Compliance.
Hayley Nelson is the President and Principal Consultant of NCA Compliance, Inc., a compliance consulting firm providing a wide range of customized compliance solutions for investment advisors. Ms. Nelson previously worked for the Securities and Exchange Commission and a large investment manager in New York.
