2015 Compliance Predictions

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Happy New Year!

With 2014 behind us and 2015 charging full-steam ahead, the CCLS team wants to share a few of our 2015 compliance predictions.

Increase Use of Technology

Based upon 2014’s results, we believe the Securities and Exchange Commission (“SEC”) will most likely continue to increase the use of technology to assist with their performance of investment adviser and broker-dealer exams.  To keep pace, investment advisory and brokerage firms should consider expanding their compliance budgets to include the implementation of technology that will assist with monitoring compliance and preventing violations.

More Focus on Cybersecurity Policies

For the past few years the SEC has placed great emphasis on cybersecurity preparedness. Cyber-crimes have increased, which is requiring financial companies to be held to higher cybersecurity standards. For these reasons, we don’t see the strong focus on cybersecurity lessening anytime soon.  Don’t wait for a cyber crime to strike, take steps to help ensure protection, including testing for electronic and physical vulnerabilities, adopting robust written cybersecurity policies, and providing employees with training on current types of cyber-crimes and how best to detect and prevent them.

Larger Fines

It does not appear as though Congress will be granting the increased funds that SEC Chair, Mary Jo White requested anytime soon , which could cause the SEC to seek heftier penalties in enforcement actions.  Some of these actions brought over the last couple of years were against investment advisory firms that didn’t have adequate compliance programs in place and had failed to perform annual reviews to identify problems.  Make sure that an annual compliance review for 2014 has been or is being performed and that any compliance gaps identified are being addressed.

We hope our 2015 compliance predictions and suggestions help you manage your Compliance Program.

For more information on this and other related subjects, please contact us at info@corecls.com or (619) 298-2880.