Looking Ahead: Compliance Considerations for 2011

As 2010 comes to an end, firms should be aware of several important considerations with regard to their compliance programs. Investment advisers with a fiscal year end of December 31 must file annual updates to Form ADV no later than March 31, 2011. In addition to updating the information contained in Part 1 of Form ADV, advisers will be required to prepare and file the new Form ADV Part 2 as part of their annual update. The new Form will be available to the public via the SEC’s website and requires a significant number of additional disclosures not required by the previous Part II. Given the significant undertaking of preparing the new Part 2, adviser should consider commencing the transition process as early as possible. For additional information about Form ADV Part 2 or for assistance in completing the transition to the new Form, please contact us as 619-278-0020.

Additionally, firms should review and test their compliance programs to ensure that their adopted policies and procedures are reasonably designed to prevent violations of applicable federal and state securities laws and the rules adopted thereunder. The SEC has indicated that it will be stepping up its examination and enforcement efforts of investment advisers and one of the focus areas of examiners will certainly be the effectiveness of firms’ compliance programs. CCLS provides a variety of services to assist firms in reviewing and testing their compliance efforts, including mock regulatory exams, risk assessments, annual reviews, and other services. For additional information, please contact us at 619-278-0020.