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:
The Growing Complexity of Distribution
ON THE SURFACE, distributing mutual funds appears to be a tremendous opportunity that is ripe for success. This used to be the case, but as geopolitical and global economic events have transpired over the last 30 years, the challenges of managing money and selling investment product have grown in complexity.
CCO Technology is excited to announce the newest members of its executive team: Dina Tantra and Mark Baltimore, co-founders of Global Rhino, LLC. According to Bo Howell, CEO of CCO Tech, the firm has been focused on building the right team, including leaders in the financial services industry that could bring fresh and thoughtful insight to our mission of helping registered investment advisers automate their compliance needs. Bo highlighted Dina's and Mark's experience in the financial services industry and shared his enthusiasm for pairing the operational and distribution expertise of Global Rhino with the technology and compliance focus of CCO Tech.