Compliance Help From the SEC

New alerts give CCOs a heads up on exam issues

More On Legal & Compliance

from The Advisor's Professional Library
  • Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
  • Pay-to-Play Rule Violating the pay-to-play rule can result in serious consequences, and RIAs should adopt robust policies and procedures to prevent and detect contributions made to influence the selection of the firm by a government entity.

The Securities and Exchange Commission is now providing a ComplianceAlert letter to chief compliance officers of SEC-registered firms to help them learn more about the common deficiencies and weaknesses that the SEC examiners find during exams.

The ComplianceAlert letter, compiled by SEC staff, is available on the SEC Web site. According to the SEC, the letter summarizes select areas that SEC examiners have recently reviewed during examinations, describes issues that were found, and encourages firms to review compliance in these areas and implement improvements as appropriate. Additional ComplianceAlert letters will be made available on the SEC's Web site (www.sec.gov).

The first ComplianceAlert letter provides information concerning recent examination findings with respect to investment advisers' performance advertising and business continuity planning; with respect to broker/dealers' compliance with Regulation SHO; and sales of collateralized mortgage obligations, real estate investment trust products, and Section 529 College Savings Plans.

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