First and foremost, Registered Investment Advisers (RIAs) are held to a standard of fiduciary duty by the SEC. As defined by the SEC, RIAs must act in the best interests of their clients, should not engage in activities that are in conflict with the interest of the client, and must provide a full disclosure of all material facts to clients and prospective clients.
To prove that they are able to meet these standards, RIA firms must have solid compliance programs in place.
U.S. Securities and Exchange Commission (SEC) enforcement for failure to maintain and preserve adequate records of electronic communications and for failure to adequately supervise the use of off-channel communications is at the top of compliance professionals' minds right now. The size and scope of the firms involved and the staggering $2.5 billion plus in penalties assessed have made the actions a hot topic in the news and across the financial services industry.
Once upon a time, there was a company that was looking to purchase compliance software. The software and manual processes that the firm was using to manage compliance just weren’t keeping up with the firm’s growth and it was time to move on.
But like Goldilocks in the classic tale of the Three Bears, they found that not all compliance software was just right.
The Monetary Authority of Singapore (MAS) is taking aim. Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) are squarely in the regulator’s sights with three recent updates.
MAS’ latest enforcement report (January 2022 and June 2023) detailed $12.96m in civil penalties imposed and $7.88m in financial fines and compositions imposed - the highest since MAS Enforcement Reports began their publication in 2019.
The 2024 Surveillance Benchmarking Survey & Report from 1LoD, co-sponsored by MCO, contains insights from thousands of conversations with surveillance leaders across the financial services industry.
As the report points out, compliance surveillance is a never-ending story. Surveillance for market abuse and employee misconduct will never be done. It’s an iterative and ongoing process.
