US Securities and Exchange Commission Staff Releases Second ComplianceAlert
On 22 July 2008, the staff of the US Securities and Exchange Commission’s (“SEC”) Office of Compliance, Inspections and Examinations published its second ComplianceAlert online newsletter.1 The ComplianceAlerts are designed to assist chief compliance officers (“CCOs”) of SEC-registered investment advisers, investment companies, broker-dealers and transfer agents with their compliance functions and to help CCOs “proactively finetune ”the compliance programs they oversee.
The most recent ComplianceAlert addresses, among other topics, personal trading and codes of ethics; proxy voting and the use of third-party proxy voting services; and soft dollar practices. The ComplianceAlert also sets out common deficiencies found in recent examinations and, in the case of personal trading, describes some internal controls that the SEC staff has found particularly effective. Common themes include incomplete procedures, failure to follow procedures, failure to monitor compliance with procedures and incomplete or inaccurate disclosures.
Because the ComplianceAlerts are compiled based on examinations of SEC-registered investment companies, broker-dealers and transfer agents as well as SEC-registered investment advisers, not all of the topics covered will be of interest to investment advisers. Non-US based investment advisers that follow the “Regulation Lite” regime are not required to adopt a written compliance program or to appoint a CCO. Nevertheless, the topics covered in the ComplianceAlerts remain relevant because those non-US investment advisers relying on “Regulation Lite” are still subject to the anti-fraud provisions of the US Investment Advisers Act of 1940 and to inspection by the SEC staff.
This update was authored by Jennifer O. Epstein (+44 20.7184.7403; email@example.com).
1) The 22 July 2008 ComplianceAlert The first ComplianceAlert, published on 14 July 2007.