ACA Compliance Group Introduces Additional Off-Site Surveillance Reviews

ACA Compliance Group is pleased to introduce six additional focused reviews as part of our off-site compliance support services. These reviews, which are provided by ACA’s dedicated team with specialized expertise in these areas, are designed to help CCOs with ongoing compliance monitoring in a broad range of risk areas. Our other off-site compliance support services include marketing materials reviews, electronic communications reviews, and personal trading compliance services.

Political contribution and pay-to-play reviews: An election year coupled with one of the strictest penalties under the Investment Advisers Act means there has never been a more important time for a firm to review its compliance with Rule 206(4)-5. ACA assists firms with identifying covered associates and jurisdictions for review, and then reviews the covered associates’ reported political contributions in the selected jurisdictions using publicly available information and internal documentation provided by the firm. We also conduct a review of a firm’s policies and procedures relative to the requirements imposed by Rule 206(4)-5, and provide recommended enhancements.

Employee-related conflict of interest reviews: Employees’ personal trading, outside activities, and personal and professional relationships can create actual or perceived conflicts of interest. We review a firm’s list of selected employees against publicly available information and other documentation, such as marketing materials, due diligence questionnaires, regulatory filings, conflict questionnaires, and other relevant internal documentation to identify potential conflicts of interest with respect to such employees. We also review and suggest enhancements to a firm’s compliance policies and procedures, conflict questionnaires, conflict monitoring processes, and other operational processes relating to conflicts of interest.

Insider trading reviews: Insider trading can damage a firm and destroy employees’ careers. We review a firm’s restricted lists and other related internal documentation against its trade blotter and certain firm-selected employees’ personal trading activities, to assist the firm with identifying specific trades for further review, and other potential compliance issues relating to insider trading. We review potential sources of material non-public information, which may include participation and usage in expert networks and certain transactions and investments. We also review and provide any recommended enhancements to a firm’s compliance policies and procedures relating to insider trading.

Access control process reviews: We often hear that one of the biggest threats to proprietary firm or client and investor information is a firm’s employees or others that have access to the firm’s systems or network. We interview a firm’s key information owners to identify key locations and/or systems where data resides. We also review and provide any recommended enhancements to a firm’s compliance policies and procedures relating to access controls.

Vendor due diligence process reviews: Regulators generally expect that firms conduct adequate and periodic due diligence of their third-party service providers. We review a firm’s list of identified vendors, looking at the firm’s previous due diligence on such vendors, including due diligence documentation, and provide feedback on the firm’s processes and how their vendor review policies (if any) were implemented. We also review and provide any recommended enhancements to a firm’s policies and procedures and other related internal documentation, and the firm’s operational practices, relating to vendor due diligence.

Form ADV peer benchmarking reviews: Wondering what your peers are disclosing on their Form ADVs? ACA’s peer benchmarking reviews reveal that information in a formalized, documented manner. We prepare a paragraph-by-paragraph comparison of a firm’s currently filed Form ADV Part 2A against the currently filed Form ADV Part 2A of up to four peers or competitors selected by the firm. Our summary reports identify material differences between the firm’s Form ADV Part 2A and those of the identified peers that may warrant additional review by the firm. We also highlight disclosure of language in the firm’s Form ADV Part 2A that appears to be materially different from industry practice.

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