Compliance Program
What Is a Compliance Program for RIAs? The compliance program is best understood as the whole operating system a firm uses to stay compliant: written supervisory policies (WSPs) covering day-to-day practices, a Code of Ethics governing personal conduct, a designated CCO responsible for administering and testing the program, and the annual compliance review that assesses […]
Code of Ethics
What Is a Code of Ethics for RIAs? The SEC’s Code of Ethics rule requires advisers to establish standards reflecting the firm’s fiduciary obligations, procedures for access persons to report personal securities holdings and transactions, requirements to obtain pre-approval for certain investments (like IPOs and private placements), and a process for reporting Code of Ethics […]
Written Supervisory Procedures (WSPs)
What Are Written Supervisory Procedures (WSPs)? WSPs translate regulatory requirements into the specific practices a firm actually follows day to day — who reviews client communications, how personal trading is monitored, how the firm handles custody or billing, and what happens when a violation occurs. Generic, boilerplate WSPs copied from a template without adapting them […]
Custody Rule (Rule 206(4)-2)
What Is the Custody Rule (Rule 206(4)-2)? “Custody” is defined broadly — it includes not just physically holding client assets, but also having the authority to withdraw funds (such as through fee deduction arrangements) or serving in certain trustee or power-of-attorney roles. Advisers deemed to have custody must use a qualified custodian (typically a bank […]
Proxy Voting Policy
What Is a Proxy Voting Policy? Advisers with proxy voting authority are required to adopt policies reasonably designed to ensure votes are cast in clients’ best interests, disclose their voting policies to clients, and maintain records of how proxies were actually voted along with any client requests for that voting history. A common conflict scenario […]
Business Continuity Plan (BCP)
What Is a Business Continuity Plan (BCP)? A BCP typically addresses data backup and recovery, alternative communication methods for reaching clients and staff, succession arrangements if key personnel become unavailable, and relationships with critical third parties like custodians and technology vendors. Firms are expected to test their BCP periodically — not just draft it once […]
Privacy Policy (Regulation S-P)
What Is a Privacy Policy Under Regulation S-P? The privacy policy must be delivered to clients at the start of the advisory relationship and, depending on the firm’s information-sharing practices, may need to be redelivered periodically. It typically covers the categories of information collected (financial data, account information, personal identifiers), the categories of third parties […]
Amendment Filing (Material vs. Annual)
What Is a Form ADV Amendment Filing? The annual amendment updates the firm’s entire Form ADV based on the prior fiscal year, and every registered adviser must file one regardless of whether anything changed. A material amendment, by contrast, is triggered by specific events — such as a change in ownership, a significant AUM shift, […]
Annual Compliance Review (Rule 206(4)-7)
What Is the Annual Compliance Review (Rule 206(4)-7)? Rule 206(4)-7 doesn’t specify an exact format for this review, but it does require that the firm actually conduct one, that a designated person (typically the CCO) is responsible for it, and that the firm can demonstrate the review took place. In practice, this usually means testing […]