Like it or not, we are living in interesting times. The shudder that ran through the global economy as a result of the pandemic has emphasized the need for boards to work closely with fund management to determine the best way forward for the business.
Foreword by Bo Howell (July 2020)
I recently attended a panel discussion designed to provide tips to stay on the right side of pay-to-play requirements. Asset managers that manage investments of public entities (primarily state and local municipalities and their agencies) need to avoid the strict liability standards that are triggered by crossing the line. Of course, the panel started with an overview of SEC Rule 206(4)-5 and similar rules by other regulatory bodies (FINRA, CFTC, MSRB, and several state agencies), which generally prohibit advisers from receiving compensation for two years if the adviser or any covered associated makes a political contribution to a government official.
In part two of our panel recap where we discussed compliance testing programs for small and medium-size firms, we zero in on the foundation. (If you missed part one: a top-down approach, you can find it here.) Flipping the top-down approach that we discussed las week, we began to look at critical components of the business and how to review and test your procedures effectively. The following are some critical areas of an adviser’s business that require testing, along with tips to keep you in the game.
PART 1 - The Top Down Approach
I had the good fortune to participate in a compliance panel with esteemed adviser CCOs in which we shared our lessons learned about building and maintaining effective compliance testing programs from top to bottom. To avoid drinking from a fire hose, I will cover the nitty-gritty details in a two-part blog, one starting from the top and the other building up from the ground floor.
As Chief Strategy Officer for CCO Tech and Co-CEO of Global Rhino (an affiliated company), I had the privilege of speaking on a panel at a national compliance conference with three esteemed industry colleagues, two in-house CCOs at asset management firms and a consulting expert in the hedge fund space. As a panel, we focused on “Tone at the Top - Culture of Compliance.” Through decades of experience in financial services, I’ve learned a lot about modifying, tweaking, and enhancing compliance practices to most effectively impact the corporate culture. Here are my top ten takeaways:
CCO Technology is pleased to introduce three experienced entrepreneurs and leaders to inaugurate its new Advisory Board: Jon Dollan, Kimberly Tapia and Craig Chambers. According to Bo Howell, CEO of CCO Tech, the firm wanted insightful leaders to formalize the exchange of ideas between CCO Tech and the industry. “We sought a diverse group of experienced entrepreneurs in the technology, services, and cybersecurity space, and Craig, Jon, and Kim have all of that and more,” Howell said. He noted that each member brings significant experience in areas of technology innovation, strategic partnerships, and development of products and services. Howell also noted that all three members served in the U.S. military, as did Howell, a point of pride for CCO Tech. Kim Tapia, new board member, expressed her excitement in being part of CCO Tech in its early days. “Bo and I spoke often in 2018 when the company was in its infancy, so it is energizing to watch how CCO Tech has already grown in the first year and where it is headed in 2019 and beyond.”