How Robust is Your Annual Review Process?

Federal regulations require investment advisers and registered investment companies to review their compliance policies and procedures annually to ensure adequacy.  Core Compliance & Legal Services, Inc. recently published a Risk Management Update (“RMU”), which discusses Securities and Exchange Commission (“SEC”) expectations and provides guidance on assessing and evaluating a firm’s annual review process. Some of the guidance includes:


  • Looking at the annual review process that was performed over the last couple of years and consider what worked well and what did not; and
  • Looking at the types of testing being performed and the results produced to determine whether any gaps exist.


Additionally, the RMU includes a list of questions to consider during the assessment and evaluation process, for example:


  • Were prior reviews performed throughout the year or a look back review?
  • Is the review process set up to focus on the firm’s risks and conflicts, in addition to requirements?
  • Were there any changes to applicable regulations that affected the firm?


Click here for a full copy of our RMU titled “Enhancing Annual Reviews – Practical Considerations for Investment Advisers and Investment Companies”. The link also takes you to our RMU library, which includes insightful articles on a wide range of industry topics.


Should you need assistance with your annual review process, please give us a call at (619) 278-0020.

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