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Are there any special books and records requirements specifically related to SEC Rule 206(4)-7?

November 02, 2018

A SEC registered investment adviser is required to maintain those records documenting its annual assessment of its supervisory and compliance policies and procedures. Additionally, an SEC registered investment adviser must maintain current copies of its supervisory and compliance policies and procedures as well as any revised supervisory and compliance policies and procedures during the past […]

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Once a registered investment adviser has developed written supervisory and compliance policies and procedures, what happens?

November 02, 2018

The first step that should be taken after developing written supervisory and compliance policies and procedures is to provide all employees of the investment adviser with a copy or access to a copy. The investment adviser should require all investment adviser representatives (“IAR”) and employees to review the supervisory and compliance policies and procedures and […]

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If a registered investment adviser purchases an off-the-shelf investment adviser compliance manual, will this meet the requirements of SEC Rule 206(4)-7?

November 02, 2018

Off-the-shelf investment adviser compliance manuals are an excellent starting point for a registered investment adviser. However, a registered investment adviser cannot expect to just purchase an off-the-shelf compliance manual and assume that the investment adviser now has sufficient written supervisory and compliance policies and procedures for the investment adviser. These documents are typically written at […]

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How does a registered investment adviser determine what needs to be included in its written supervisory and compliance policies and procedures?

November 02, 2018

The first step to determine what areas should be covered in an investment adviser’s written supervisory and compliance policies and procedures is to perform a risk analysis of the investment adviser. This means that the registered investment adviser should identify conflicts of interest, business practices, arrangements, and other compliance factors creating risk exposure for the […]

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What must be covered in an SEC registered investment adviser’s written supervisory and compliance policies and procedures?

November 02, 2018

SEC Rule 206(4)-7 indicates that a registered investment adviser’s supervisory and compliance policies and procedures must be reasonably designed to prevent violation of the Investment Advisers Act of 1940 by the investment adviser or any of its supervised persons. A registered investment adviser must consider and incorporate its fiduciary and regulatory obligations. Each investment adviser […]

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Who should an SEC registered investment adviser designate as a chief compliance officer (“CCO”)?

November 02, 2018

SEC Rule 206(4)-7 states that an SEC registered investment adviser’s chief compliance officer (“CCO”) should be competent and knowledgeable regarding the Investment Advisers Act of 1940 and should be empowered with full responsibility and authority to develop and enforce appropriate policies and procedures for the investment adviser. A registered investment adviser’s chief compliance officer should […]

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Is a registered investment adviser firm with only one investment adviser representative and no other employees required to maintain written supervisory and compliance policies and procedures?

November 02, 2018

If your investment adviser is registered with the SEC or with a state securities regulator that requires written supervisory and compliance policies and procedures, your investment adviser is required to maintain such policies and procedures regardless of the number of employees or investment adviser representatives, if any, affiliated with the investment adviser. However, securities regulators […]

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Is a state registered investment adviser required to maintain written compliance policies and procedures?

November 02, 2018

The requirement of whether a state registered investment adviser must maintain written compliance policies and procedures varies from state to state. All investment advisors, without regard to SEC or state registration, are required to establish, maintain and enforce written policies and procedures that are reasonably designed to prevent the misuse of material non-public (“insider”) information. […]

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Is an SEC registered investment adviser required to maintain written supervisory and compliance procedures?

November 02, 2018

On February 5, 2004, the United States Securities and Exchange Commission adopted SEC Rule 206(4)-7 of the Investment Advisers Act of 1940 requiring SEC registered investment adviser firms to adopt and implement written supervisory and compliance policies and procedures and to designate a chief compliance officer to administer its compliance policies and procedures.

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