Third Quarter Personal Securities Transaction Reports

With the end of third quarter 2007, RIA Compliance Consultants would like to remind all SEC registered investment advisors of their requirement to collect or prepare updated personal securities transaction reports from all access persons. The information on the reports must reflect transactions that took place during the third quarter and must officially be reported to the firm no later than 30 days after the end of the quarter. Therefore, all reports must be collected by October 30. As part of the SEC Code of Ethics rule, all SEC registered investment advisor firms are required to review the activity of their access persons' securities holdings at the end of every calendar quarter. The quarterly reports and documented review/approval of each report must be retained as part of a registered investment advisor firm’s official books and records.

It is important for investment advisor firms to not only collect these reports, but to also establish a system of reviewing and documenting the reviews of all reports. In particular, the review of personal securities transactions should attempt to detect instances or patterns when the interests of the firm or its access persons are placed ahead of the interests of clients.

Most states also require registered investment advisor firms to maintain, as part of their books and records, a record of every transaction within a personal account. Most states require the transaction to be reported within 10 days after the end of the calendar quarter in which the transaction occurred. State firms must also implement policies restricting insider trading.

If your firm has questions or concerns about your firm's requirements to monitor and review personal securities transactions, please give us a call to discuss how we can help your firm meet its regulatory obligations.

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