News & Commentary on Financial Regulatory and Compliance Matters
On June 5, 2019, the Securities and Exchange Commission (SEC) voted 3-1 to adopt a series of proposals intended to “substantially enhance” the standards of conduct for financial professionals.
First and foremost, the SEC adopted Regulation Best Interest (Reg BI), a new rule establishing an updated standard of conduct for broker-dealers and associated persons of…
On August 7, 2017, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued its third National Exam Program Risk Alert of the 2017 calendar year, detailing OCIE’s findings and observations from its Cybersecurity 2 Initiative. This Cybersecurity 2 Initiative, the name for OCIE’s second round of cybersecurity examinations, builds on OCIE’s prior 2015 Cybersecurity…
Earlier this week, the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) issued a new Risk Alert (available here) related to the use of outsourced chief compliance officers (CCOs) by SEC-registered investment advisers and investment companies (Registrants). The Risk Alert shares staff observations of Registrants who outsource their CCO functions to unaffiliated third-parties resulting from nearly 20 examinations under OCIE’s Outsourced CCO Initiative. The Risk Alert identified a number of key concepts that should be considered by Registrants.
First, Registrants with outsourced CCOs should review their business practices in light of the risks highlighted by the staff and the Registrant’s responsibilities under applicable compliance rules. The Risk Alert emphasizes that Registrants not only must assure that outside CCOs have the requisite knowledge and experience to carry out the responsibilities of a CCO, they should also have the authority and access to the organization needed to accomplish their duties.
Continue Reading OCIE Issues Risk Alert on Use of Outsourced Chief Compliance Officers