More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
Chief compliance officers continue to take on more and more responsibility while struggling to keep up with the pressure of ongoing regulatory changes, according to a poll released Tuesday by SEI. The poll was conducted at the company's recent fifth annual CCO Forum.
The results showed that 68% of CCOs felt that having too many other responsibilities was the greatest impediment to their ability to be effective. Another 14% cited a lack of resources or funding as their greatest deterrent to success.
SEI said in a statement that its poll points to CCOs’ continuing struggle to keep up with a dramatically changing regulatory environment in the face of shrinking or stagnant resources. The CCOs surveyed represented organizations ranging from $500 million to $5 billion in assets under management.
Half of all CCOs said their biggest challenge in 2010 has been preparing for new or pending regulatory changes. The poll also showed that 82% of respondents were more concerned about their personal liability than they were two years ago, pointing to the ongoing pressures compliance professionals must deal with. At the same time, 73% said their compliance budgets had either not changed or had decreased.
"The harsh reality is that CCOs are being asked to do more and more and their resources aren't growing to meet the need," Jim Volk, CCO for SEI's Investment Manager Services division, said in the statement.
Despite the increase in regulatory scrutiny across the board, 42% of respondents said they had not been subject to an SEC examination or direct SEC inquiry in more than two years. Only 25% said they had been subject to more than one SEC inquiry in the past 18 months.
SEI's Investment Manager Services division provides comprehensive operational outsourcing solutionsto global investment managers focused on mutual funds, hedge and private equity funds, exchange traded funds, collective trusts and separately managed, as well as institutional and private client, accounts. The division applies operating services, technologies, and business and regulatory knowledge to each client's business objectives
SEIis a global provider of outsourced asset management, investment processing and investment operations solutions to help corporations, financial institutions, financial advisors and affluent families create and manage wealth. As of September 30, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $402 billion in mutual fund and pooled assets and manages $164 billion in assets.