By Charles Black
Reality Check is an occasional blog post series we do where we analyze actual SEC enforcement actions or examination experiences and give you a summary of what to expect in the “real world.”
With every new regulatory policy or form, the first time implementing it is always challenging. There are no models to follow or examples to guide you. Fortunately for our readers, we’ve cleared away some of the high brush to give you a clearer path.
Joot’s compliance experts have completed nearly two dozen Form CRSs for our clients. Based on that experience, here are 10 things to keep in mind.
What is the cost of non-compliance? How much should an RIA spend on compliance? Are these compliance tools and services worth it? The answers to these questions become clearer when we look at both the direct and indirect impact of examination and enforcement actions taken by the SEC.
We are excited to announce the newest addition to the Joot team: Charles Black! Charles brings over 17 years of experience in the asset management industry, including roles in compliance, fund accounting, and fund administration. Charles has served as a compliance officer for both investment advisers and investment companies. Most recently, he served as the Chief Compliance Officer for a few mutual fund clients.
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.
We are excited to announce the newest addition to the Joot team: John Ramirez! According to Bo Howell, CEO of Joot, the firm has been growing steadily and it is focused on building the right team to deliver both innovative technology and exceptional services.
Joot grows its team and area of expertise!
CINCINNATI, OHIO – August 1, 2019 - Joot, a leading provider of compliance technology and services to small and middle-sized investment advisers, today announced its merger of Advisory Compliance Solutions, LLC (ACS). As part of the merger, Cynthia Lower Custer, Managing Member of ACS, will become Treasurer and Director of Compliance Services at Joot.
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:
FOR IMMEDIATE RELEASE
CCO Tech announces the release of its Compliance Calendar, the second module of an integrated web-based compliance system for small- and mid-sized registered investment advisers (RIAs). The Compliance Calendar allows RIAs to schedule their compliance tasks and receive notices and reminders of important dates. The application integrates directly with CCO Tech’s SEC Filing Manager and creates calendar entries based on important data points in an adviser’s Form ADV. Additional modules are expected in February and March to create a comprehensive compliance system.
For many asset managers and investment companies, the topic of compliance tends to focus on federal securities, particularly Rule 206(4)-7 under the Investment Advisers Act of 1940 (the "Advisers Act) and Rule 38a-1 under the Investment Company Act of 1940 (the "Company Act"). While these rules and the SEC's guidance related to them are important, state law also plays a vital role in compliance. Delaware case law and other legal principles support the conclusion that chief compliance officers of SEC-registrants also have a fiduciary duty under state law to develop, enact, and maintain a robust compliance program.
FOR IMMEDIATE RELEASE
Cincinnati, OH (October 1, 2018) - CCO Tech today announces the release of its SEC Filing Manager, the first module of an integrated web-based compliance system for small- and mid-sized registered investment advisers (RIAs). SEC Filing Manager automates the completion of Form ADV, the starting point for regulatory compliance filing for every SEC-registered investment adviser. Additional modules will soon be released to create a comprehensive compliance system.