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What are the recordkeeping requirements of an SEC registered investment adviser related to the SEC’s Code of Ethics rule?

November 02, 2018

With respect to the code of ethics, the SEC requires a SEC registered investment adviser to maintain the following documents: copies of the investment adviser’s codes of ethics; copies of the code of ethics acknowledgements signed by supervised persons of the investment adviser; records of violations of the code of ethics and actions taken as […]

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Are there any specific requirements relating to violations of a SEC registered investment adviser’s code of ethics?

November 02, 2018

Pursuant to SEC Rule 204A-1, a SEC registered investment adviser’s code of ethics must require prompt internal reporting of any violations to the investment adviser’s code of ethics. Violations must be reported to the investment adviser’s chief compliance officer. However, an investment adviser’s code of ethics may require that violations be reported to another designated […]

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Other than the requirements of the Rule, what else should be considered or included by an investment adviser when drafting a code of ethics?

November 02, 2018

The following are areas that should be considered when preparing a code of ethics for a registered investment adviser: Pre-clearance of personal securities transactions by access persons; Maintenance of lists of issuers of securities that the advisory firm is analyzing or recommending for client transactions and prohibitions on personal trading in securities of those issuers […]

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If a SEC registered investment adviser only has one access person, must the access person complete personal securities transaction and holdings reports?

November 02, 2018

If a SEC registered investment adviser has only one access person, the access person is not required to submit personal securities transaction and holding reports to this same access person for approval; however, this investment adviser must maintain copies of all personal securities transaction and holding reports as required by the SEC’s rule.

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Can a SEC registered investment adviser accept confirmations and statements in lieu of a personal securities transaction report by the access person?

November 02, 2018

Confirmations and statements may be accepted in lieu of transaction and holdings reports so long as the confirmations and statements contain all required information and as long as the information is current within 45 days of reporting for holdings reports and so long as they are received within 30 days of the end of each […]

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Are there any exclusions to the personal securities holdings and transaction reporting requirements of access persons of a SEC registered investment adviser?

November 02, 2018

An access person of a SEC registered investment adviser is not required to report any personal securities held in accounts over which the access person has not direct or indirect influence or control and any transactions effected pursuant to an automatic investment plan.

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Does a registered investment adviser have to obtain personal securities holding and transaction reports if the access person does not have any reportable securities holdings or transactions?

November 02, 2018

The SEC rule does not require an investment adviser to obtain reports indicating that access person does not have any transactions or holdings to report. However, many investment advisers choose to require this type of reporting to ensure that all access persons are consistently aware of the personal securities holding and transaction reporting requirements.

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What is a reportable security for purposes of a personal securities transaction or holding report of an access person of a SEC registered investment adviser?

November 02, 2018

A reportable security is any security defined in Section 202(a)(18) of the Securities Act of 1933. The Rule considers all securities reportable with the exception of the following: Direct obligations of the Government of the United States; Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debit instruments, including repurchase agreements; Shares […]

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What information must be included in the personal securities transactions reports of an access person of an SEC registered investment adviser?

November 02, 2018

All personal securities transaction reports must, at a minimum, cover all personal securities transactions during the calendar quarter for which the report is being completed. The following information is the minimum information that must be included in the personal securities transaction report for each reportable security: The date of the transaction; The title of the […]

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What information must be included in the personal securities holdings report of an access person of an SEC registered investment adviser?

November 02, 2018

At a minimum, the personal securities holdings reports must contain the following for each reportable security that the access person of the investment adviser has any direct or indirect beneficial ownership: The title and type of security; The exchange ticker symbol or CUSIP number; The number of shares; The principal amount; The name of any […]

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