The Gift of Guidance

As an SEC examiner, we used to keep our playbook private. However, the OCIE now shares guidance through Risk Alerts and outreach engagements, giving us insight into the Division of Enforcement’s litigation releases. The Division of Investment Management helps create the framework for new rules through its adopting releases. This week, we’re considering amendments to advertising and solicitation rules and look forward to hearing from staff. While we appreciate these guidelines, it’s essential to use them continually to improve our policies and procedures. Recently, OCIE emphasized that CCOs need necessary resources and knowledge and recommended outsourcing an independent review to evaluate compliance programs. Checklists demonstrating reviews of SEC guidance releases are also helpful. An independent review fulfills compliance requirements, client demands and brings peace of mind.

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.

About YCC

Yuter Compliance Consulting (YCC) is an internationally recognized boutique compliance consulting firm offering consultation and support services trusted by the industry’s chief compliance officers. Yuter Compliance Consulting partners with clients to provide personalized consultation and support to enhance compliance resources and improve compliance programs.