Category Archives: Compliance Forms

DoL Proposes Fiduciary Rule Delay

August 11, 2017

The United States Department of Labor (“DoL”) indicated in a court filing yesterday, August 9, 2017, that it would be seeking an eighteen-month delay in implementing the second phase of the fiduciary rule. This phase, originally scheduled to go into effect on January 1, 2018, would require investment advisers who receive variable compensation to comply with the Best Interest Contract Exemption (“BICE”). A signature feature of the Fiduciary Rule, BICE permits investment advisers to receive variable compensation only if they sign a contract with clients promising to put the clients’ interest before their own. The second phase also implements exemptions for principal transactions and insurance agents.

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Addition to RIA Compliance Consultants’ Sample Forms Library – Non-Access Person Acknowledgement Form

October 13, 2016

RIA Compliance Consultants added a new Sample Form to our Sample Forms Library. Our new Non-Access Person Acknowledgement Form is for investment advisers to document employees who are “non-access persons.” According the Securities and Exchange Commission (SEC), an investment adviser’s “access persons” are, “any of the investment adviser’s supervised persons who have access to non-public information regarding any investment advisory client’s purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund or any person who is involved in making securities recommendations to investment advisory clients, or who has access to such recommendations that are nonpublic.”

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Investment Advisers Need Strong Policies and Procedures for Supervising Social Media

June 23, 2015

Social media and networking websites are considered forms of advertising covered by Rule 206(4)-1, Advertisements by Investment Advisers, under the Investment Advisers Act of 1940 (“Investment Advisers Act”) and similar state securities regulations.  In a National Examination Risk Alert issued in 2012 by the Office of Compliance Inspections and Examinations of the U.S. Securities and Exchange Commission (“SEC”), the term social media is described as:

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How Your Investment Advisers Can Streamline the Annual Form ADV Delivery Requirements

May 30, 2013

An investment adviser is required to prepare and submit a completed Form ADV as part of the initial registration process.  In addition to the review by the U.S. Securities and Exchange Commission (“SEC”) or state securities regulator(s) for purposes of determining whether to approve or deny an application for investment adviser registration, the Form ADV Part 2 is also used as the investment adviser’s disclosure document which is required to be provided to all investment advisory clients.

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Registered Investment Advisors Can Utilize a Sample ADV Annual Offer Letter to Help Comply with Form ADV Part 2A Annual Delivery Requirements

April 17, 2013

An investment advisor firm registered with the U.S. Securities and Exchange Commission (“SEC”) must meet certain requirements concerning the delivery of the investment advisor firm’s disclosure brochure Form ADV Part 2A. Under SEC Rule 204-3(b), each year, within 120 days of the investment advisor firm’s fiscal year end, the investment advisor firm must deliver to every client an updated disclosure brochure that includes a summary of material changes or deliver to every client a summary of material changes that includes an offer to provide a copy of the updated disclosure brochure and information on how a client may obtain the brochure.

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Investment Advisers Must Develop Strong Insider Trading Policies and Procedures

April 10, 2013

According to the U.S. Securities and Exchange Commission’s (“SEC”) website, “Insider trading continues to be a high priority area for the SEC’s enforcement program. The SEC brought 58 insider trading actions in FY 2012 against 131 individuals and entities.  Over the last three years, the SEC has filed more insider trading actions (168 total) than in any three-year period in the agency’s history.”  Improper use of inside information when conducting any securities transaction is a serious violation of securities law. Section 204A under the Investment Advisers Act of 1940 (“Investment Advisers Act”)  requires SEC registered investment advisers to “…establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of such investment adviser’s business, to prevent the misuse…of material, nonpublic information by such investment adviser or person associated with such investment adviser.”  Most state securities regulators have the same requirements.  Investment advisers should note that this requirement is much broader than the SEC’s personal securities transaction reporting and supervision requirement under Rule 204A-1 (“Code of Ethics Rule”) of the Investment Advisers Act.

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