SEC: Investment Advisers Can ‘Tailor’ Cybersecurity Policies and Procedures to Fit Their Business

Though the SEC has proposed requiring cybersecurity policies and procedures for investment advisers for the first time, it has also provided firms flexibility in addressing the general elements to be covered. “We recognize that there is not a one-size-fits-all approach to addressing cybersecurity risks. As a result, the proposed cybersecurity risk management rules would allow firms to tailor their cybersecurity policies and procedures to fit the nature and scope of their business and address their […]

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SEC Examiners: Advisers Should Review Policies and Procedures for Calculating Advisory Fees

SEC examiners have recommended that investment advisers “review routinely, refine, and improve, as appropriate, their fee billing policies, procedures, and practices and address new risks as they are identified” to ensure that they are calculating advisory fees correctly. They also should review their disclosures to confirm that clients are aware of all fees and expenses and related material conflicts of interest, examiners have suggested. Examiners made the recommendations after identifying deficiencies related to the advisory […]

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SEC Urges Stricter Robo-Adviser Compliance

The SEC has suggested that investment advisers improve robo-adviser compliance by tightening policies and procedures for automated digital investment advisory services. The regulator gave deficiency letters to “nearly all” of the advisers whose robo-advisory services it recently examined, according to a new SEC risk alert regarding electronic investment advice. “The examinations conducted within the scope of this review resulted in a range of actions,” the SEC stated in the risk alert. “In response to the […]

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SEC and FINRA Exam Priorities to Include Firms’ AML Compliance Programs, Including Policies and Procedures

SEC’s Office of Compliance Inspections and Examinations (OCIE) has issued its examination priorities for 2020. According to the document, OCIE will assess the adequacy of firms’ AML compliance programs, including relevant policies and procedures. AML Compliance was also cited by FINRA as an area of focus in its recent 2020 Risk Monitoring and Examination Priorities Letter. “The Bank Secrecy Act requires financial institutions, including broker-dealers and investment companies, to establish anti-money laundering (AML) programs. These programs must, among […]

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Key Takeaways: FINRA’s 2019 Report on Examination Findings and Observations

On October 16, 2019, FINRA published its 2019 Report on FINRA Examination Findings and Observations.  This report is a useful resource for firms to leverage to improve their compliance and risk management programs.  One of the findings in the report pertains to failure to effectively monitor for and react to regulatory changes.  Firms are required to review regulatory changes against their supervisory systems, including their written supervisory procedures and training programs.  FINRA found that some […]

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