Investment Advisers Should Expect More Frequent Regulatory Exams

September 13, 2011

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With the upcoming regulatory switch of mid-sized investment advisers from the U.S. Securities and Exchange Commission (“SEC”) to state securities regulators and Congress considering whether to authorize a self-regulatory organization (“SRO”) for investment advisers, we believe that the frequency of investment adviser examinations is going to rise.

During a regulatory exam, your investment adviser firm is required to produce its books and records and the regulators will conduct interviews with your firm’s management and employees.  The purpose of these exams is to test your investment adviser’s compliance with the applicable securities regulations and to ensure client assets are properly protected.  According to the SEC, the most common issues found during exams are the “misappropriation of client funds, conflicts of interest, breach of fiduciary duty, misrepresentations to investors, valuation issues, offering unregistered/fraudulent securities, and material compliance program deficiencies and books and records concerns.”

To address these issues, RIA Compliance consultants is hosting a webinar, “Preparing for a Regulatory Exam,” on Thursday, September 15, 2011 from 12:00 p.m. to 1:00 p.m. Central.  During this webinar, RIA Compliance Consultants will provide an overview of the regulatory examination process. One of our consultants will discuss the different types of examinations; the information and documentation that will likely be requested during an examination; and some of the common regulatory deficiencies found during the examination process. We will also provide you with some general guidance and tips for preparing for and getting through the examination.  To register for this webinar, click here.

Posted by Bryan Hill
Labels: Books Records, Compliance Program, Compliance Training, Record Keeping, Regulatory Inspections, SEC Inspection