RIA Compliance Consultants, Inc.

🚨 Reminder for Investment Adviser Representatives 🚨 IARs must complete IAR CE courses and IAR CE Providers must report those course completions to FINRA before the CRD system shutdown on December 26 to ensure IAR CE credits are applied before the end of the year. Avoid any impact to your IAR registrations by finishing your coursework well ahead of the deadline. For more details, click here: https://lnkd.in/ePfj4ZpQ

Have you been receiving an overwhelming number of solicitations for political campaigns this year? For certain investment advisers, making contributions can lead to complex compliance issues. Rule 206(4)-5 was issued by the SEC to prevent “pay-to-play” political campaign contribution practices by investment advisers. Who does it cover? Rule 206(4)-5 applies to the following investment advisers providing advisory services to governmental clients: - SEC-registered investment advisers; - Exempt Reporting Advisers (ERAs); and - Investment advisers relying on the foreign adviser exemption. This SEC rule does not cover investment advisers registered only with a state securities regulator; however, many states have additional requirements for political campaign contributions. Key provisions include: - A two-year “time-out” on compensation for advisers and "covered associates" who make political contributions to officials with influence over hiring. - Look-back period: contributions made two years prior to becoming a “covered associate” can affect eligibility. - Covered associates include executives, soliciting employees, and controlled PACs. Best practices for investment advisers serving government clients: conduct pre-hire screenings; establish robust policies; and monitor contributions continuously. Stay informed and safeguard your firm against the risks of non-compliance! For more details, see the link below in the comments. #RIACompliance #InvestmentAdvisors #InvestmentAdvisers #SEC #PayToPlay ⚠️ Important Information This post is for general educational purposes only and should not be considered advice to the reader. A client relationship is not created by merely reading this post. For additional information or specific guidance, the reader should consult with his or her compliance professional for advice tailored to the reader’s specific circumstances.

Two investment advisers recently avoided fines after allegedly failing to file the Form 13F because they self-reported their violations to the SEC. This definitely will lead to interesting conversations between investment advisers and their defense counsels. Click on link below in the comments to learn more about these recent enforcement actions and when investment advisers are required to file the Form 13F. #SEC #RIACompliance #InvestmentAdvisers #InvestmentAdvisors #Form13F #SelfReporting #SecuritiesCompliance ⚠️ Important Information This post is for general educational purposes only and should not be considered advice to the reader. The author of this post has not verified the accuracy of the allegations in the enforcement actions. A client relationship is not created by merely reading this post. For additional information or specific guidance, the reader should consult with his or her compliance professional for advice tailored to the reader’s specific circumstances.

The SEC recently fined two investment adviser firms for allegedly failing to supervise “cherry-picking” practices by two of its IARs. Below are key allegations, which serve as a cautionary example for investment advisers related to cherry-picking. The IARs allegedly allocated profitable trades to their own accounts and unprofitable trades to client accounts. The SEC explained that this scheme involved observing stock price movements throughout the day before allocating trades. With respect to the initial firm, the SEC noted that its policies mandated pre-trade allocation but allowed IARs to place aggregated trades through personal accounts. The SEC alleged that IARs were allowed to use their personal accounts to place aggregated trades without first submitting pre-trade allocation statements. The SEC asserted that that the initial firm failed to monitor the fairness of allocations of these aggregated trades. The SEC stated that the subsequent firm had policies requiring IARs to place aggregated orders through certain internal systems which “do not allow modifications to order allocations after a trade has been placed ….” The SEC concluded that the subsequent firm failed to implement its block trading policies by not requiring the IARs to place aggregated orders through the internal systems that would have flagged the cherry-picking activities. In light of this case, the following are best practices for a CCO to consider. Fair Allocation Methodology: Establish a written block trade allocation methodology that is fair and equitable. Personal Accounts: Prohibit IARs from placing block trades in IAR’s personal account and then transferring executed trades from the personal account to client accounts. Pre-Trade Disclosure: Require (prior to or at the time the order is entered) written and time-stamped initial allocations for any block trade orders. Supervisory Review: Review allocation reports daily and investigate any exceptions. Periodic Testing: Review a sampling of block trades to verify compliance with allocation procedures. Monitor Profitable Market Movements: Scrutinize whether trades are allocated based on subsequent market movements. (Please understand that this is not a comprehensive listing of the techniques for detecting cherry picking.) By implementing these and other best practices, a CCO can better safeguard both the firm and its investment advisory clients. #RIACompliance #InvestmentAdvisers #InvestmentAdvisor #SEC #CherryPicking #BlockTrades ⚠️ Important Information This post is for general educational purposes only and should not be considered advice to the reader. The author of this post has not verified the accuracy of the allegations in the enforcement actions. A client relationship is not created by merely reading this post. For additional information or specific guidance, the reader should consult with his or her compliance professional for advice tailored to the reader’s specific circumstances.

FinCEN’s final anti-money laundering (AML) rule is here, and it’s time to get prepared! SEC-registered investment advisers and Exempt Reporting Advisers (ERAs) must implement a comprehensive AML program to comply by January 1, 2026. It's critical for investment advisers covered by the rule to dedicate the time and resources needed during the upcoming year to meet these new requirements. The rule includes risk-based AML programs, SAR filings, and compliance testing. Don’t wait until the last minute—start building your program now! To help you and your team get up to speed, check out our IAR CE course, which covers the new AML rule in detail and will help to ensure you’re well-prepared. Learn more about the rule and register for the course at https://lnkd.in/gfPpKTjX You can also read our blog post for a summary of the new requirements and how they apply to your firm: https://lnkd.in/gvEkY6q5 #InvestmentAdvisors #InvestmentAdvisers #RIACompliance #SEC #AML ⚠️Important Disclosures: This regulatory alert is a summary which is general in nature and offered only for educational purposes. It should not be considered as a comprehensive review or analysis of this development. There are certain requirements and exceptions outlined in the rule which are not covered in this regulatory alert. There may be additional obligations and nuances not covered here. Each investment adviser firm is unique, and specific guidance may be required to address your firm's circumstances. This communication is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation without further analysis. This regulatory alert is not a safe harbor or a legal opinion. Merely reading this regulatory alert does not create an engagement with RIA Compliance Consultants, Inc. The reader should study the actual guidance, rule or enforcement action in detail and consult with his or her compliance professionals. This information in this regulatory alert may become out of date.

📢 Regulatory Alert: The U.S. Department of Treasury’s FinCEN has issued a new anti-money laundering (AML) and counter-terrorism financing (CFT) rule that impacts investment advisers registered with the U.S. Securities and Exchange Commission (SEC) and Exempt Reporting Advisers (ERAs). These rules aim to safeguard the U.S. financial system from illicit activities. ✨Key Highlights: - Covered advisers must implement a comprehensive, risk-based AML program. - Conduct independent testing of their AML program by qualified internal or external personnel. - File Suspicious Activity Reports (SARs) and comply with currency transaction and recordkeeping requirements. - Compliance deadline: January 1, 2026. 📚 Need to Know More? Our investment adviser representative continuing education course covers the basic requirements of the new AML rule. To register for this IAR CE course, visit https://lnkd.in/gpn_JW_5 . 🔎 Learn more by reading our detailed blog post at https://lnkd.in/gGsYzu-P . ⚠️Disclaimer: This regulatory alert is a summary which is general in nature and offered only for educational purposes. It should not be considered as a comprehensive review or analysis of this development. There are certain requirements and exceptions outlined in the rule which are not covered in this regulatory alert. There may be additional obligations and nuances not covered here. Each investment adviser firm is unique, and specific guidance may be required to address your firm's circumstances. This communication is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation without further analysis. This regulatory alert is not a safe harbor or a legal opinion. Merely reading this regulatory alert does not create an engagement with RIA Compliance Consultants, Inc. The reader should study the actual guidance, rule or enforcement action in detail and consult with his or her compliance professionals. This information in this regulatory alert may become out of date.

Is your investment adviser firm exercising discretion over $100 million in Section 13(f) securities but not currently filing Form 13F? If so, learn more by reading our latest blog on the Form 13F filing requirements and the SEC's recent enforcement action against investment advisers failing to file. #InvestmentAdvisers #InvestmentAdvisors #RIACompliance #SEC #Form13F #AUM #SecuritiesCompliance ⚠️ Important Information This post is for general educational purposes only and should not be considered advice to the reader. The author of this post has not verified the accuracy of the allegations in the enforcement actions. A client relationship is not created by merely reading this post. For additional information or specific guidance, the reader should consult with his or her compliance professional for advice tailored to the reader’s specific circumstances. https://lnkd.in/g3dqnXNm

The securities regulators in both Nebraska and New Jersey have recently adopted a new requirement that each investment adviser representative licensed in their particular jurisdiction is required to complete 12 hours of investment adviser continuing education (approved by NASAA) each year (starting in 2025). If you’re interested in obtaining IAR CE from members of our highly experienced team at RIA Compliance Consultants, Inc., please visit our continuing education website at https://lnkd.in/gQ7NZb4N . ⚠️ Important Information This post is for general educational purposes only and should not be considered advice to the reader. A client relationship is not created by merely reading this post. For additional information or specific guidance, the reader should consult with his or her compliance professional for advice tailored to the reader’s specific circumstances. #RIACompliance #investmentadvisers #investmentadvisors #IARCE

Learn more about the new filing requirements of Form N-PX and the upcoming 8/31/24 deadline for certain investment advisers in this Citywire article which quotes Bryan Hill of RIA Compliance Consultants.

To the extent that you are seeking to join an SEC registered investment adviser that provides advisory services (or intends to provide advisory services in the next two years) to a government entity or quasi-government entity, this recent SEC enforcement action, which alleges a violation of the pay-to-play rule, is worth reviewing. See https://lnkd.in/ggDr3Ug6 By structuring your contributions to meet the de minimis and/or new associate exceptions, you can avoid being excluded from a new position due to your political contributions. You can learn more about Rule 206(4)-5 and recent SEC enforcement actions related to political contributions by attending our complimentary webinar on Wednesday, August 28, at 12:00 p.m. U.S. Central: https://lnkd.in/gFSmtuin #RIACompliance #SEC #InvestmentAdvisers #PayToPlay ⚠️ Important Information This post is for general educational purposes only and should not be considered advice to the reader. A client relationship is not created by merely reading this post. For additional information or specific guidance, the reader should consult with his or her compliance professional for advice tailored to the reader’s specific circumstances.