It’s been a little over two years since the Securities and Exchange Commission issued its infamous rule–known as the compliance rule–requiring advisors to have a written compliance manual and to designate a chief compliance officer for their firms. Since then, advisors of all sizes and types have been bombarded with warnings by lawyers and compliance gurus that they’d better get the lead out and get serious about the SEC mandate. A good many advisors have heeded those warnings; others have not–particularly smaller firms.
If you’re one of those firms that’s still dithering on the sidelines hoping that your compliance program is up to snuff, it’s time to get serious. A good place to turn for help is the Regulatory Compliance Association’s (RCA) new CCO University, which launched last October. The program includes a 30-course Master of Adviser Compliance Degree curriculum that offers courses on such topics as principles of compliance, soft dollars, SEC examination preparation, hedge fund compliance issues (see sidebar on SEC upping the accredited investor minimum on page 98), advertising and marketing, code of ethics, best execution, and so on. You can view the entire course list by logging on to www.rcaonline.org and clicking the CCO University link. The courses are taught by compliance officials, CPAs, and lawyers at prominent law firms, as well as SEC officials.
Walter Zebrowski, chairman of RCA and a principal at TurboCompliance, which builds governance risk and compliance platforms, says that by issuing its formal set of compliance requirements, “the SEC essentially escalated advisor compliance to the level of broker compliance, and there is now a gaping hole of what the SEC expected and what the [investment advisory] industry was taught.”
Zebrowski says that’s precisely why officials, including himself, working for RCA’s corporate sponsors–which includes firms like Ernst & Young, McGladrey & Pullen, Dechert LLP, and TurboCompliance–recognized the need to develop a formal program that would teach advisors how to be a chief compliance officer. “The NASD has a [compliance] program for broker/dealers, but that’s for B/Ds, not for advisors,” he says.
What Your Peers Are Reading
From the Four Corners
Zebrowski says students of all types have been signing up for the online courses–CPAs, lawyers, operations and compliance officials, technology personnel, advisors, and people from abroad. The Financial Services Administration (FSA)–the SEC of the United Kingdom–is also offering a compliance series similar to the CCO University, Zebrowski says. While most of the courses deal with advisor compliance, some courses also pertain to Sarbanes-Oxley compliance, he notes, adding that even regulators are signing up for some courses. However, RCA doesn’t charge regulators a fee, he notes. RCA members can pick and choose among courses, which cost $150 each, or they can take the entire Masters Program and pay between $2,250 and $2,500. An RCA membership is $250 per year.
RCA elected not to provide a credential for those completing the Masters Degree, Zebrowski says, because there are just too many credentials out there. “We wanted to develop an educational program from an intellectually honest perspective that would provide somebody with the foundation to be able to develop a compliance program,” he says.
According to the CCO University’s Web site, each course includes: a textbook, generally 15 pages, exclusive of footnotes, endnotes, exhibits, or forms; a course outline, generally in a PowerPoint format; a lecture, delivered in an “on demand” Webcast format, generally two to four hours; and a final exam, generally 25 questions in multiple-choice format.