Compliance
Services
Summary
The SEC not only requires documented compliance policies and
procedures that comply with the Compliance Programs Rules, it also
requires documented proof that firms are conducting risk
assessments, actively monitoring controls, detecting issues and
remediating deficiencies. The testing aspect of the Compliance
Program Rules involves a complete re-evaluation and revision of
written policies and procedures to ensure that all areas of risk as
well as all applicable federal securities laws are covered. This
includes training of new employees as well as training of new
procedures to ensure procedures are effectively implemented.
The Adviser’s Act requires investment advisers to adopt a code of
ethics that sets forth standards of business conduct and requires
compliance with federal securities laws. The code of ethics must
address personal trading, conflicts of interest, and the
safeguarding of material nonpublic information about client
transactions. ICSGroup can develop a code of ethics that meets the
requirements of the Act and is customized to your business model.
The Compliance Rule requires advisors to no less frequently than
annually review the operation of their policies and procedures to
ensure their continued effectiveness in preventing, detecting and
correcting compliance problems. ICSGroup’s compliance review will
involve a review of each of the applicable Compliance Program Rules
and the policy and procedure related to each rule; as well as a test
of each procedure to ensure that it adequately prevents or mitigates
violations of the Compliance Rule.
One of the keys to developing a successful compliance program is
to implement a robust compliance training program. An effective
on-going training program can help maintain a culture of compliance
and provide an opportunity to remind staff of critical areas,
provide direction and answer questions. From new hire compliance
training to on-going compliance training for staff ICSGroup can
develop and deliver a training program that meets your needs.
SEC requires that Form ADV be revised to reflect material
changes. ICSGroup will review the ADV policy and procedures are
effective to ensure compliance. ICSGroup will check Form ADV
disclosures against SEC form requirements to make sure disclosures
are up-to-date and accurate and the disclosures in ADV Part I are
consistent with those in ADV Part II. We will also check client
files to make sure ADV Part II was offered to each client in writing
at least annually as required.
Investment Adviser advertising is regulated under the general
anti-fraud provision of the Adviser’s Act. The SEC Advertising Rules
prohibits the publication, circulation or distribution of any
“advertising” that is “false or misleading”. The SEC recognizes that
whether a given communication is “misleading’ is intrinsically
subjective and generally refuses to provide guidance on this issue.
ISCGroup’s industry experience and knowledge of applicable no action
letters enables us to review advertising material and offer guidance
as to whether the material constitutes advertising and whether the
SEC would likely find it to be misleading.
Rule 204-2 sets forth the records that investment advisers must
maintain, as well as the manner in wgich such records should be
maintained. The Adviser’s Act also requires that Advisers maintain
the originals of all written communications received and copies of
all written communications (defined by the SEC to include e-mails)
sent to any party, including persons who are not clients of the
firm, relating to the business of providing investment services.
ICSGroup can help you develop and implement a records retention
policy that complies with the Advisers Act and works for your
employees.
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”)
conducts sweeps, regulatory inquiries and exams designed to detect
compliance problems and discover weaknesses in firms’ internal
controls that may lead to violations of the federal securities laws.
ISCGroup keeps abreast of “hot” areas of review by the OCIE and can
assist your firm in gathering and reviewing the requested documents
and work with your team to prepare appropriate response to requests
for information and deficiency letters.
Despite the most effective Compliance Program, a regulatory issue
may still arise. How the issue is handled can make all the
difference in terms of the impact to a firm’s reputation. ICSGroup
can provide expert guidance as to how best to address the issue and
manage communications pertaining to it. From determining whether or
not to self-disclose to the SEC to how best to respond to media
inquiries and drafting communications to employees and clients, we
will be your trusted partner in protecting your firm’s reputation.
Investment advisors have a fiduciary obligation to better
understand the entities with which it does business. While
representations and warranties provided reasonable assurance in the
past that service providers’ business practices were in compliance
with regulatory standards, recent history has highlighted the need
for more thorough due diligence. ICSGroup has developed a Third
Party Due Diligence Checklist that we use to fully assess the
business structure and operations of those entities that seek to do
business with your firm.
For those firms that engage in solicitation of funds outside the
United States, navigating the various international laws is complex
and carries significant penalties for violations. ICSGroup can
partner with counsel experienced in international sales to ensure
that the laws of each country are clear and up-to-date and that your
offering is in full compliance with the laws of the specific
country.
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Dodd-Frank Wall Street Reform Signed Into Law
