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Year-End Compliance Wrap Up

As 2018 comes to a close and 2019 quickly approaches, Red Oak Compliance Solutions has some friendly reminders to help end the old year and begin 2019 on a good note.
Friday, December 28, 2018


Submitted by: Joshua Kelly, Compliance Consultant, Red Oak Compliance Solutions

As 2018 comes to a close and the new year quickly approaches, Red Oak Compliance Solutions has some friendly reminders to help you begin 2019 on a good note.

Important Year-End Reminders:

  • The first and most important rule for all investment advisers, you are a Fiduciary. This means that every decision you make must be in the best interest of your clients. If you have a choice to make more money for yourself or make more money for your client, you better choose the client, or you will be paying the profits back, with interest.
  • All investment advisers, whether registered with the SEC or any of the fifty states, are required to maintain and enforce Written Supervisory Procedures that are designed to ensure they are in compliance with Statutes, Rules and Regulations. Please make note, the procedures cannot just regurgitate the rules; they must describe the policies and procedures of the adviser that are in place to ensure compliance with the rules. More importantly, if you say you are, or are not, going to do something in your procedures, make sure you are doing what you say you are, or are not, going to do.
  • If you are registered with the SEC, you must have a Code of Ethics. Some states also require a Code of Ethics. Make sure the Adviser’s supervised persons have reviewed the document and your Code of Ethics are in compliance.
  • Fund IARD for your Renewal Fees before the end of the year. Many states will terminate your registration within the first couple of weeks of January if your fees are not in the IARD account.
  • File your required Annual Amendment to your ADV Parts 1 and 2 and send out a copy of the annually amended ADV within 90 days of your fiscal year end.
  • Send all existing clients a copy of your Privacy Policy within 90 days of your fiscal year end.

Other Important Reminders:

  • For those registered with the SEC, make sure you are keeping tabs on your 13 Filings. These should be done quarterly but remember to check to see if you need to file 3rd quarter 2018 and 1st quarter 2019. For those managing private funds with an AUM of $150 Million or more, remember to file your annual Form PF. For those managing funds with AUM of 41.5 Billion or more, you should be filing quarterly.
  • Although it does not have to be done at year end or beginning, it is a good time to conduct a best execution review as a requirement of your fiduciary duty. The SEC “recommends” their registrants conduct a Best Execution Review at least quarterly (this means you should conduct a quarterly best execution review).
  • If you are deemed to have physical custody of client funds, this is a good time to ensure your agreement with the independent third-party CPA that conducts the Annual Surprise Audit is in good order.
  • And finally, the SEC and some states require an Annual Review of the Compliance Manual, Code of Ethics, Business Continuity and Cyber policies. This review should be summarized via a written report and risk assessment.

Although seemingly daunting, remember it is easier to maintain a compliance program than it is to create or clean up a poorly developed compliance program. We help broker-dealers, advisors, investment firms, and hedge funds meet regulatory requirements, improve their compliance programs and increase ROI. We provide customized services to get your firm up and running, on-going compliance assistance, workflow software solutions and much more to keep your compliance program on track.

For more information about Red Oak Compliance software and services solutions, partnership and/or integration opportunities or to schedule a demonstration, please visit us online, email us sales@redoakcompliance.com or give us a call at 888-302-4594.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.

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