When I was an SEC examiner, we held our playbook closer to our vests. Today’s OCIE readily shares guidance through its frequently issued Risk Alerts and outreach engagements. We also receive insightful lessons from the Division of Enforcement’s litigation releases. The Division of Investment Management provides the framework and decision making on which new rules were based in its adopting releases. We look forward to understanding the staff’s perspective with the advertising and solicitation rule amendments to be considered this week.
In acknowledging the benefits we have received, there’s an important caveat for which you should be aware. We are expected to use the guidance – to click open the publications, compare the contents against our programs, enhance our policies and procedures where warranted and continually improve ourselves and our compliance programs.
In its most recent Risk Alert issued on November 19, OCIE conveyed that CCOs must have the requisite resources and knowledge to execute their responsibilities. OCIE Director Pete Driscoll further suggested, in follow up remarks, that CCOs could consider engaging an outside expert to independently review the adviser’s compliance program. The appointment of an independent reviewer, an individual other than the person creating and overseeing the program, may assist CCOs in supporting that they have the appropriate resources called for by OCIE. Creating checklists to evidence reviews of SEC guidance releases will also go a long way with OCIE examiners.
Speaking of checklists, consider an independent review to check other boxes: satisfying client and consultant demand for 3rd-party analysis, carrying out a focused mock exam, fulfilling compliance program rule required testing, and achieving compliance peace of mind.
