Search results

1 – 10 of over 19000
To view the access options for this content please click here
Article
Publication date: 1 January 2004

David E. Scott

The challenges involved in meeting the new requirements of Rule 206 (4)‐7 under the Investment Advisers Act of 1940 and Rule 38a‐1 under the Investment Company Act of 1940…

Abstract

The challenges involved in meeting the new requirements of Rule 206 (4)‐7 under the Investment Advisers Act of 1940 and Rule 38a‐1 under the Investment Company Act of 1940 will be substantial for some organizations. At a minimum, all organizations will be required to document their compliance policies and procedures. Also, many firms, particularly fund managers and advisers with large or complex operations, most likely will be required to institute a number of additional control processes as a result of the new rules. Additionally, many organizations probably will need to reevaluate their compliance resource needs in order to successfully implement the new rules by their compliance date. Among the issues this article highlights are coverage of compliance programs in SEC examinations; development of functional policies, procedures, and controls; compliance staffing needs; and oversight by funds’ boards of directors.

Details

Journal of Investment Compliance, vol. 4 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 2000

JOAN L. LAVELL

This article offers a practical approach to demonstrating the pitfalls of broker‐dealers not preparing written supervisory procedures. By showing examples of legal…

Abstract

This article offers a practical approach to demonstrating the pitfalls of broker‐dealers not preparing written supervisory procedures. By showing examples of legal complications that can arise, as well as outlining the current regulatory directives in favor of written procedures, the author emphasizes that written supervisory procedures cannot be treated lightly or as a back‐burner issue.

Details

Journal of Investment Compliance, vol. 1 no. 1
Type: Research Article
ISSN: 1528-5812

To view the access options for this content please click here
Article
Publication date: 9 September 2013

Therese Pritchard, Jeff Kalinowski and Jeff Ziesman

The purpose of this paper is to remind investment advisers of the need for robust compliance policies and procedures in light of a recent SEC administrative proceeding in…

Abstract

Purpose

The purpose of this paper is to remind investment advisers of the need for robust compliance policies and procedures in light of a recent SEC administrative proceeding in the case of IMC Asset Management, Inc.

Design/methodology/approach

The paper describes discrepancies the SEC cited in IMC's compliance program and its chief compliance officer's (CCO's) performance, and recommends compliance policies and procedures that firms should review, including compliance staff training, experience and competence; appropriate number of compliance personnel; periodic review of policies and procedures; and attention to SEC examination findings.

Findings

This matter follows several other settled cases, which were resolved in late 2011, in which the SEC alleged serious overall compliance program deficiencies and found that the CCOs at those firms did not devote enough time to compliance responsibilities.

Practical implications

In light of the SEC administrative proceeding, investment advisers should consider the compliance program review measures recommended in this article.

Originality/value

The paper provides practical guidance by experienced financial services lawyers.

Details

Journal of Investment Compliance, vol. 14 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 1 July 2005

Securities Industry Association, Compliance and Legal Division

To discuss the scope and limits of the compliance department's responsibilities in securities firms.

Abstract

Purpose

To discuss the scope and limits of the compliance department's responsibilities in securities firms.

Design/methodology/approach

Describes the background to establishing stand‐alone compliance departments; the organizational structure of compliance departments; typical compliance functions; how the compliance department coordinates with business units, senior management, internal audit, and risk management; the distinction between a firm's responsibility to comply with applicable laws and regulations and the role of the compliance department; the distinctions between responsibilities of the compliance department and those of supervisors and senior management; and emerging regulatory trends impacting the compliance department.

Findings

New business activities and new regulations have placed increased demands on, and scrutiny of, compliance activities over the past few years. Regulators are looking to compliance departments to play an increasingly important role in identifying proactively and responding to potential wrongdoing.

Originality/value

Explains the critical importance of a well staffed, experienced, and adequately funded compliance department.

Details

Journal of Investment Compliance, vol. 6 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 1 October 2006

Michael R. Rosella and Domenick Pugliese

This paper sets out to assess the role of the chief compliance officer (“CCO”), how the CCO performs his/her duties, and how the CCO interacts with the fund's board three…

Abstract

Purpose

This paper sets out to assess the role of the chief compliance officer (“CCO”), how the CCO performs his/her duties, and how the CCO interacts with the fund's board three years after the adoption of Rule 38a‐1 under the Investment Company Act of 1940.

Design/methodology/approach

Reviews the CCO's responsibilities under Rule 38a‐1, discusses how the CCO role has evolved since the rule was promulgated, and focuses on key issues such as oversight versus supervision, the annual review process, risk assessement, testing methodologies, and the annual report to the fund board on the adequacy and operation of the fund's compliance program.

Findings

Properly conducted compliance requires the support of a wide range of the advisory/administrative team with the CCO playing the role of conductor of the orchestra. More and more CCOs seek to distance themselves from approving the day‐to‐day actions of other employees, so they cannot be considered to have assumed supervisory responsibility for those employees. Although a fund is required to perform an annual review of the adequacy of its compliance programs and its Primary Service Providers' compliance programs, most CCOs have found the review process is ongoing and occurs continuously throughout the year. Now that these compliance programs have been in place for two years, more CCOs are devoting time and resources to identify high‐risk areas and to implement transactional, periodic, and forensic testing programs. The CCO annual report has taken many different shapes and sizes, but generally summarizes material changes to the fund's compliance policies and procedures that have already been reported to the board.

Originality/value

A current, practical assessment of the CCO role by expert lawyers who advise funds on their compliance programs.

Details

Journal of Investment Compliance, vol. 7 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 2004

Keith T. Robinson and R. William Hawkins

As part of an ongoing and potentially far‐reaching overhaul of investment company and investment adviser regulation, the Securities and Exchange Commission recently…

Abstract

As part of an ongoing and potentially far‐reaching overhaul of investment company and investment adviser regulation, the Securities and Exchange Commission recently adopted Rule 206 (4)‐7 under the Investment Advisers Act of 1940 and Rule 38a‐1 under the Investment Company Act of 1940. These new rules require each fund and adviser to implement written compliance policies and procedures and to appoint a chief compliance officer (CCO) to administer those policies and procedures. While funds and advisers have until October 5, 2004 to comply with the new rules, the breadth of those rules requires a concerted, early effort to implement the new requirements successfully by that date. This article summarizes the requirements of the new rules, focusing on the CCO requirement, and addresses the following issues that advisers and fund boards will confront (among many others) in recruiting and appointing a CCO: (i) the source of the CCO’s compensation, (ii) potential supervisory liability of a CCO, (iii) outsourcing the position of CCO, and (iv) the desired qualifications of a CCO.

Details

Journal of Investment Compliance, vol. 4 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 7 September 2015

James Burns, Georgia Bullitt, Howard Kramer, Jack Habert and James Doench

– To explain the requirements of Regulation Systems Compliance and Integrity (“Regulation SCI”) and the new responsibilities of organizations defined as “SCI entities.”

Abstract

Purpose

To explain the requirements of Regulation Systems Compliance and Integrity (“Regulation SCI”) and the new responsibilities of organizations defined as “SCI entities.”

Design/methodology/approach

Explains the purpose of Regulation SCI, the responsibilities of SCI entities, systems covered by the rules (“SCI systems”), and specific obligations of SCI entities, including the establishment and periodic review of policies and procedures, compliance with the Exchange Act, designation of “responsible SCI personnel,” appropriate corrective action in response to “SCI events,” notification of systems changes, annual “SCI reviews,” business continuity and disaster recovery testing, and recordkeeping and filing. Discusses future implications for SCI Entities and other market participants.

Findings

Regulation SCI launches a broad and extensive overlay of rules and guidance to address systems capacity and integrity issues that have increasingly affected the securities markets. The adoption of this regulation suggests that there will continue to be increased scrutiny by the SEC, FINRA and other regulators of the automated systems and related policies and procedures of all market participants.

Practical implications

SCI entities will need to devote considerable attention and resources not just to prevent incidents where possible, but also to establish systems for ensuring thorough compliance and well-documented and reasonable follow-up actions where necessary. All market professionals – including broker-dealers, investment advisers, pension funds and investment companies – should study the new regulation and consider adopting appropriate policies and procedures to address operating as well as cyber security issues with respect to their own critical operating technology.

Originality/value

Practical guidance from experienced financial services lawyers.

Details

Journal of Investment Compliance, vol. 16 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 13 June 2008

Brian Fahey and Marc Rinaldi

The purpose of this paper is to assist investment company managers in proactively navigating the risky and ever‐changing market and regulatory environment and to provide…

Abstract

Purpose

The purpose of this paper is to assist investment company managers in proactively navigating the risky and ever‐changing market and regulatory environment and to provide an outline for a flexible and robust risk‐based compliance management methodology.

Design/methodology/approach

The paper makes recommendations on: becoming familiar with best practices in internal controls and regulatory trends, reassessing compliance management goals and objectives, identifying risk scenarios and related compliance events, designing control systems, updating compliance policies and procedures, and conducting periodic reviews of compliance management systems.

Findings

The paper reveals that compliance risks have attained a new level of visibility. To minimize potential hazards, current and evolving risks must be identified, documented and effectively managed by investment firms, regulators and legislators.

Originality/value

The paper provides practical advice by a compliance management systems provider and a consultant specializing in compliance and risk‐based due diligence consulting.

Details

Journal of Investment Compliance, vol. 9 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 8 May 2018

Scott R. Anderson, James Audette and Kate S. Poorbaugh

To summarize the Municipal Securities Rulemaking Board’s 2017 Compliance Advisory for brokers, dealers and municipal securities dealers.

Abstract

Purpose

To summarize the Municipal Securities Rulemaking Board’s 2017 Compliance Advisory for brokers, dealers and municipal securities dealers.

Design/methodology/approach

Summarizes several Municipal Securities Rulemaking Board (MSRB) rules that the Compliance Advisory highlights as presenting key compliance risks for brokers, dealers and municipal securities dealers. Discusses the factors included in the Compliance Advisory that dealers should consider when evaluating compliance procedures and controls.

Findings

By highlighting some key compliance risks and providing considerations tailored to those risks, the Compliance Advisory can be used as a tool to aid dealers in developing and assessing effective compliance programs.

Practical implications

Dealers should consider reviewing their firm’s existing compliance policies and procedures in light of the considerations discussed in the Compliance Advisory.

Originality/value

Practical guidance from experienced securities and financial services regulatory lawyers.

To view the access options for this content please click here
Article
Publication date: 18 September 2007

Brian A. Ochs

The purpose of this article is to analyze the SEC enforcement staff's recent scrutiny of the roles and responsibilities of securities firms for the protection of…

Abstract

Purpose

The purpose of this article is to analyze the SEC enforcement staff's recent scrutiny of the roles and responsibilities of securities firms for the protection of confidential information.

Design/methodology/approach

The article reviews the SEC's implementation and enforcement of section 15(f) of the Exchange Act and section 204A of the Advisers Act. Part I discusses the legislative history of these provisions and reviews SEC and staff pronouncements relating to procedures for the protection of material nonpublic information. Part II discusses the potential consequences, from an enforcement perspective, of a firm's failure to satisfy the requirements of section 15(f) or section 204A. Part III describes the SEC's enforcement program in this area and distills guidance for securities firms from the SEC's actions.

Findings

Sections 15(f) and 204A require brokers, dealers, and investment advisers to “establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of such (broker, dealer, or investment adviser's) business, to prevent the misuse” of material nonpublic information. Thus, the statutory terms frame the issues in any SEC investigation. Does the firm maintain written procedures? Are the written procedures reasonably designed to safeguard material nonpublic information? In particular, are the procedures designed with a view toward the specific structure and business activities of the firm? Has the firm taken reasonable steps to enforce its written procedures?

Practical implications

Given the SEC's current enforcement emphasis in this area, it is essential that brokers, dealers, and investment advisers look critically at whether they are taking adequate steps to protect the confidential information they may handle on a daily basis.

Originality/value

The paper presents a practical guide by an experienced enforcement attorney.

Details

Journal of Investment Compliance, vol. 8 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

1 – 10 of over 19000