Under U.S. Securities and Exchange (“SEC”) Rule 204A-1, an investment adviser registered with the SEC is required to establish a written code of ethics that outlines the standards of business conduct of the registered investment adviser’s supervised persons and reflects the fiduciary duties of the registered investment adviser. Likewise, numerous state securities regulators require a state registered investment adviser to develop and maintain a written code of ethics consistent with the particular state securities regulator’s rules for registered investment advisers. Moreover, there are several provisions of the governing federal securities law for investment advisers, the Investment Advisers Act of 1940 (“IAA”), that also apply to a state registered investment adviser such as Section 206 of the IAA, which prohibits fraudulent conduct, and Section 204A of the IAA, which requires an investment adviser to maintain and enforce written policies to prevent insider trading.
The development of a code of ethics, compliance policies and supervisory procedures without professional assistance can be challenging to the average registered investment adviser firm. It can be time consuming since most registered investment adviser firms lack technical writers and may not be familiar with all of the applicable regulations and corresponding best practices. You can avoid or mitigate many of these challenges by engaging RIA Compliance Consultants to develop, revise or update your registered investment adviser’s code of ethics, compliance policies and supervisory procedures in order to meet the applicable requirements of your state securities regulator or the SEC.
RIA Compliance Consultants can provide your registered investment adviser with a model code of ethics, compliance policies and supervisory procedures covering subjects such as firm registration, investment adviser representative registration, fiduciary duty, insider trading, personal securities trading and holdings by access persons, outside business activities, gifts, required books and records, privacy policies and procedures, conflicts of interest, proxy voting, custody, trading, annual Form ADV offer, advisory services and fees, complaints, advertising and marketing, and business continuity plans. At your option, this model code of ethics, compliance policies and supervisory procedures can be customized by RIA Compliance Consultants to fit your registered investment adviser’s particular business practices and any applicable requirements of your state securities regulator. If your investment adviser is state registered, RIA Compliance Consultants would strongly recommend that your firm avoid using a generic compliance manual and engage us to provide a model code of ethics, compliance policies and supervisory procedures that are specific to the actual requirements of your state securities regulator since regulations of investment advisers do vary among states.
If your registered investment adviser would like to leverage the experience and knowledge of RIA Compliance Consultants, your firm can obtain a proposal for our Code of Ethics & Written Supervisory Procedures Drafting Services by contacting us at 877-345-4034 or completing our on-line request for proposal.