Mike Dryton, Rob Stirling
Description:
In its release adopting Rule 206(4)-7 under the Investment Advisers Act of 1940, the SEC stated that an investment adviser’s policies and procedures should employ “compliance tests that analyze information over time” to determine the effectiveness of its compliance policies and procedures. In May 2005, the SEC staff suggested using three compliance tests: Transactional, Periodic and Forensic. The SEC staff has repeatedly sent clear signals in CCOutreach Seminars, speeches and elsewhere that they are taking the issue of forensic testing seriously. Andrew Donahue, Director of the SEC Division of Investment Management, has encouraged the implementation of forensic testing. SEC Document Request Lists typically request the following: “Information relating to the firm’s compliance testing, including any compliance reviews, quality control analyses, surveillance, and/or forensic or transactional test performed by the firm. This information should include any significant findings, both positive and negative, of such testing and any information about corrective or remedial actions taken regarding these findings. Staff will review these documents on-site.”
This presentation will focus on developing a compliance testing plan and understanding forensic testing.
For whom:
Chief Compliance Officers, compliance professionals and others working in the compliance area such as legal counsel, and managers.
Learning Objectives:
How to develop a compliance testing plan
Understanding types of compliance tests and specific tests
Understanding forensic tests
Testing processes in key areas such as: brokerage arrangements, trading, personal trading, gifts and entertainment, billing, valuation, AML , and email
Using information technology to support forensic testing
Establishing a protocol for reviewing and reporting forensic test results
Using forensic tests to enhance internal controls and procedures
Pre-requisites for participation:
No prerequisites are required. However, attendees can benefit by reviewing the Investment Advisers Act of 1940.