Category Archives: Written Policies and Procedures
 

New NASAA Report on Diminished Capacity Among Investment Adviser Representatives

August 08, 2020

The North American Securities Administrators Association, Inc. (“NASAA”) recently released a white paper detailing the results of a study conducted by its Senior Issues/Diminished Capacity Committee. While many investment adviser firms are increasingly aware of issues related to diminished capacity in clients, NASAA has found that not all registered investment advisers are prepared to identify and address diminished capacity among investment adviser representatives. As part of the study, NASAA surveyed a number of financial institutions and industry professionals including Bryan Hill, President of RIA Compliance Consultants, Inc.

Continue Reading

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.

Continue Reading

SEC Revises Performance Fee Rules

July 05, 2016

The U.S. Securities and Exchange Commission (“SEC”) recently finalized revisions to Rule 205-3 under the Investment Advisers Act of 1940, raising the net worth requirements for individuals who are charged performance fees.  The SEC increased the threshold requirements for “qualified clients” to account for inflation, which the Dodd-Frank Act and section 205(e) of the Advisers Act require it to do every 5 years.

Continue Reading

Websites a Common Place for Advertising Deficiencies

June 02, 2015

Nearly all investment adviser firms have at least one if not more websites and their prevalence continues to grow, but have you reviewed your investment adviser firm’s website recently? Websites are a great way to advertise your firm’s business and attract new clients, but they can also be a treasure trove for securities regulators.

Continue Reading

Business Continuity Plan, including Succession Plan

September 05, 2014

The North American Securities Administrators Association (NASAA) proposed a model rule requiring investment advisers to create and implement written procedures to address business continuity and succession planning in the event of the owner’s and other key personnel’s untimely departure or a natural disaster (http://www.nasaa.org/wp-content/uploads/2014/08/IA-RFPC-Model-Rule-Model-Guidance.pdf). With this proposal NASAA has caught up with the United States Securities and Exchange Commission’s (SEC) requirements for federally registered investment advisers to establish business continuity and disaster recovery plans.

Continue Reading

South Carolina Registered Investment Adviser’s Deadline to Submit their Written Policies and Procedures Manuals

July 24, 2014

The U.S. Securities and Exchange Commission (“SEC”) has a long-standing rule requiring registered investment advisers to develop, maintain and periodically assess written compliance policies and procedures.  A majority of state securities regulators also require state registered investment advisers to develop written compliance and supervisory procedures.  For example, South Carolina is one of the many states that requires its state registered investment advisers to develop a written compliance manual.  South Carolina makes this explicit through the South Carolina Uniform Securities Act Regulation 13-408(A)(19), which is found under the subheading “Record Requirements of Registered Investment Advisers.”  This regulation requires a state registered investment advisers to have “…written procedures to supervise the activities of employees and investment adviser representatives that are reasonably designed to achieve compliance with applicable securities laws and regulations.”

Continue Reading

Identity Theft and Wire Fraud Policies and Procedures

November 19, 2013

The compliance date, November 20, 2013, for the SEC’s Regulation S-ID: Identity Theft Red Flags Rule is quickly approaching.  If your investment adviser is required to comply with these new rule requirements, you must have policies and procedures in place to address risks of identity theft by the November 20, 2013, compliance date.  Every investment adviser should take the appropriate steps to protect its clients from identity theft and wire order fraud, even if it is not required to comply with Regulation S-ID.

Continue Reading

Investment Advisers Must Take Steps to Protect Their Clients from Identity Theft and Third-Party Wire or Check Fraud

October 15, 2013

On April 10, 2013, the U.S. Securities and Exchange Commission (“SEC”) jointly with the Commodity Futures Trading Commission issued final rules and guidelines to require certain regulated entities to establish programs to address risks of identity theft.  The compliance date, November 20, 2013, for the SEC’s Regulation S-ID: Identity Theft Red Flags Rule is quickly approaching and investment advisers meeting the definition under the new rules of a “financial institution” or a “creditor” that offer or maintain one or more “covered accounts” will need to make sure that they meeting the new regulatory requirements by the compliance date.  (Click here to view our previous article on Regulation S-ID or click here to purchase our previously recorded webinar on this topic.)  Many investment advisers may determine that Regulation S-ID does not apply to them, but this does not mean that these investment advisers do not need to have any policies and procedures relating to identity theft and protecting the clients’ assets.

Continue Reading