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SEC Focuses on MNPI and Code of Ethics Issues

The SEC issued the Risk Alert Investment Adviser MNPI Compliance Issues to provide investment advisers, investors, and other market participants with information concerning notable deficiencies that the the Division of Examinations (“EXAMS”) has cited related to material non-public information (MNPI) and Code of Ethics Issues.

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Authority, Ability & Responsibility: Keys to CCO Liability

If you’re in Compliance, you know the crucial role that the Chief Compliance Officer plays in helping to maintain integrity in the securities industry and preventing violations. CCOs’ jobs are challenging enough given the wide range of obstacles they face day to day without having to routinely worry about whether simply carrying out their responsibilities will subject them to personal liability.

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What’s the Latest in Books and Records Compliance?

It should come to no surprise to compliance teams that the management of Books and Records is in the regulatory spotlight. The 2022 Report on FINRA’s Examination and Risk Monitoring Program includes a section on Books and Records, and appropriate recordkeeping and record retention is a consistent theme in the SEC’s 2022 Examination Priorities. And this priority on proper keeping of books and records has been a consistent regulatory focus year over year.

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SEC Examination Issues for Private Fund Advisers

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.

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There’s No Doubt - Private Fund Regulation is Here to Stay

According to the U.S. Securities and Exchange Commission’s 2021 Examination Priorities, in the  last five years the number of Registered Investment Advisers the SEC Division of Examinations oversees increased from about 12,000 to more than 13,900, and the assets under management of RIAs increased from approximately $67 trillion to $97 trillion.

Because of the totality of assets managed, RIAs are always going to be a priority for the SEC. Examinations are not going anywhere. The Division has made significant process, staffing and technology updates to keep up with the growth and increase RIA coverage. In 2020, a year where COVID forced a mid-year switch to remote examinations, Division coverage of RIAs was 15%.

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