Last week, the Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) highlighted its five biggest noncompliance peeves which result in deficiency letters.
And the noncompliance winner is…
Want to know what upsets the regulators most?
Failure to adopt and implement written policies and procedures (WSPs). To quote the SEC’s most recent Risk Alert (emphasis added):
The Compliance Rule makes it unlawful for an adviser to provide investment advice to clients unless the adviser:
What does WSP noncompliance look like?
The SEC highlighted four compliance common gaps:
Your compliance manuals don’t reasonably reflect an adviser’s business The SEC wants you to develop and circulate WSPs that take into account your advisor’s specifics, like:
Plus, cookie-cutter WSP solutions won’t cut it. The regulators prefer to see custom packages — not “off-the-shelf” compliance manuals that might not reflect your adviser’s individual business practices.
The regulatory alphabet is still watching
The SEC is not the only regulatory body keeping an eye out for financial errors and omissions (or outright wrongdoing!). In last week’s blog post, we discussed the 2017 targets Financial Industry Regulatory Association (FINRA) was eying, and one of their priorities was…WSPs.
But don’t overpay! Noncompliance can be costly — we talk about fines and jail sentences in this blog all the time. But, compliance doesn’t have to break the bank. Patrina is offering a 90-day, FREE trial of its comprehensive 8-module compliance solution. And that’s just the tip of our iceberg!
Let’s talk (212-233-1155). Ask about Patrina’s comprehensive compliance solutions and compliant data capture, file storage, and records archiving specifically designed for the financial services community.