Regulatory Compliance Association Reviews

SEC Risk Alert

SEC Risk Alert

National Exam Program Risk Alert

Fairmont Southampton, Bermuda
Date: April 17 – 19, 2016

Room Reservations: Call 1-800-441-1414
Reference “RCA 2016 Symposium” to
receive the reduced rate of $279 – $299 per night

SYMPOSIUM TUITION RATES

Standard Registration: $2098
Subsidized Registration: $1498
PracticEdge Members: $1198
RCA myUniversity: Complimentary (Contact Your Curriculum Advisor)

16 hours of CLE and CPE (Accounting & Auditing Credit)

The SEC’s Examination Staff have noted an increasing trend within the alternative investment and asset management: outsourcing compliance activities to third party consultants.  Some investment advisers and funds have outsourced all compliance activities to consultants, including the Chief Compliance Officer (CCO) role.

In order to assess the propriety of outsourcing compliance activities, and the CCO role, the SEC examined 20 investment advisers.  The SEC’s “Outsourced CCO Initiative” identified the several factors relevant to outsourcing any compliance activities and a few factors directly related to outsourcing the CCO role.

Factors Relevant to Effectively Outsourcing Compliance Activities:

  • The compliance program appeared to be proactive rather than reactive;
  • The compliance program supported open communication between service providers and those with compliance oversight responsibilities;
  • Compliance appeared to be an important part of the registrant’s culture; and
  • The compliance program was reasonably designed to prevent, detect, and address violations of the Advisers Act, Investment Company Act, and other federal securities laws.

Factors Specific to Properly Outsourcing the CCO Role

  • The CCO appears to have sufficient authority to influence adherence with the registrant’s compliance policies and procedures, as adopted, and was allocated sufficient resources to perform his or her responsibilities; and
  • The CCO was administering a compliance environment that addressed and supported the goals of the Advisers Act, Investment Company Act, and other federal securities laws, as applicable (i.e., compliance risks were appropriately identified, mitigated, and managed).

To view the entire Report, CLICK HERE