More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- How to Avoid Sabotaging Your Compliance Exam There is much more to compliance examination survival than knowing all of the rules. It helps to understand why the rules were put in placeand to recognize that examiners are not the enemy.
? At the 2010 Investment Management Consultants Association (IMCA) New York Consultants Conference on January 10, IMCA introduced its new president, John Granzow, who began a two-year term on January 1. He is managing director of investments at Wells Fargo Advisors, LLC, in Charlotte, North Carolina. In addition, IMCA announced that Sean Walters will be its new executive director, when Edythe (Dede) Pahl retires on March 1. Pahl announced her plan to retire last summer. Walters has been IMCA's deputy executive director since June 2007.
? The Securities and Exchange Commission (SEC) has appointed Carlo V. di Florio as director of the agency's embattled Office of Compliance Inspections and Examinations (OCIE). OCIE, formerly headed by Lori Richards, received a lot of scrutiny from Congress and the industry for failing to detect the Bernie Madoff Ponzi scheme. As head of OCIE, di Florio will oversee the SEC's nationwide examination programs for investment advisors, broker/dealers, mutual funds, credit rating agencies, and self-regulatory organizations among other entities.
? The SEC also adopted December 16 custody rules that would require advisors who have custody of clients' assets to submit to annual surprise examinations by outside auditors. The new rules, the SEC says, "provide safeguards where there is a heightened potential for fraud or theft of client assets." According to the SEC, the rules "promote independent custody and require the use of independent public accountants as third-party monitors. Depending on the investment adviser's custody arrangement, the rules would require the adviser to be subject to a surprise exam and custody controls review that are generally not required under existing rules."