MyComplianceOffice Blog

It should come as no surprise to compliance teams that the management of Books and Records is in the regulatory spotlight. The U.S. Securities and Exchange Commission (SEC) recently charged several large Wall Street firms with widespread record keeping failures. The firms will be required to pay combined penalties of more than $1.1 billion, and also must make substantive improvements to their compliance policies and procedures around books and records.

Compliance is a crucial business function for every large-scale and small-scale organisation. It is imperative that organisations monitor the compliance landscape on a consistent basis. However, doing so requires a great deal of time and resources, and remaining compliant at all times is an even bigger task.

The Division of Examinations of the U.S. Securities and Exchange Commission recently released a Risk Alert to provide an overview of compliance issues observed in examinations of registered investment advisers that manage private funds. The alert covered areas including conflicts of interest when actions are inconsistent with disclosures and noted the importance of policies and procedures.

Every single firm, no matter how big or small, has to adhere to all the latest regulations, requirements and laws. However, many small-sized firms struggle with meeting their compliance obligations, as they lack sufficient resources to properly manage this area.

Failure to disclose connected persons and personal relationships as required by firm policies and jurisdictional regulations can lead to significant consequences for both an individual and their firm. Recent events saw two high-profile media executives resign from their jobs because they failed to disclose their relationship under the organization’s disclosure policies, not because of the nature of the relationship itself.