The Importance of An Adviser’s Annual Review

Feb. 2013

 

Whether you are a new Chief Compliance Officer ("CCO") for a newly formed registered investment adviser or a firm that has been in business for more than a decade, conducting the Annual Review allows for an opportunity to reflect upon the strength of your advisory compliance program. Pursuant to Rule 206(4)-7 of the Advisers Act of 1940, as amended ("Advisers Act"), all Securities and Exchange Commission ("SEC") registered investment advisory firms must perform, no less than annually, a review of its compliance program. This includes testing its efficacy to ensure that the internal controls of the organization prevent violations and circumvention of federal securities laws. The Annual Review is a critical component of your compliance program and is subject to review by the SEC during an examination.

 

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