From the June 2009 issue of Investment Advisor • Subscribe!

Not Just the CCO

Sidebar to the Experts Corner "Complacency, Risk and the SEC"

More On Legal & Compliance

from The Advisor's Professional Library
  • The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
  • Recent Changes in the Regulatory Landscape 2011 marked a major shift in the regulatory environment, as the SEC adopted rules for implementing the Dodd-Frank Act.  Many changes to Investment Advisers Act were authorized by Title IV of the Dodd-Frank Act.  

While the chief compliance officer (CCO) should of necessity be the main player in the compliance review process, whenever possible I strongly recommend that at least one other firm officer be substantively involved in the review. It is imperative for senior management (an individual other than the CCO) to have a working understanding of the compliance processes and exam-related issues in the event of the CCO's absence or resignation or termination. The SEC is not likely to postpone an exam in the event of a CCO's extended absence or resignation/termination. Ultimately, senior management is responsible, and must be sufficiently prepared to step in if necessary. For these reasons, I strongly encourage senior management's participation in the compliance review process.

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