The New Year is almost here! And with it? New rules, regulations, requirements…and possibly examinations.
But before you start planning your 2024 compliance, it’s important to look back on any successes and challenges from the past 12 months, as well as any shifts in regulation or industry trends that could impact your firm’s future.
Top 10 compliance blogs of 2023
To help you round out your year-end look back, we’ve collected our top ten most popular blogs of 2023, including Form PF changes, ChatGPT concerns and more.
The SEC approved new rules for private fund investment advisers aimed at increasing transparency and investor protections in the private fund market, which went into full effect in November 2023.
Under the rules, SEC-registered private fund advisers need to provide quarterly statements, undergo an annual financial statement audit and obtain fairness or valuation opinions for adviser-led secondary transactions. Both registered and exempt advisers have updated disclosure requirements as well.
Explore this top blog to learn more about what the updates include and how your team can successfully comply with them.
2. How to perform a regulatory compliance gap analysis for your firm’s program
Chief Compliance Officers (CCOs) are tasked with creating and implementing compliance procedures – but how do they know if those practices are actually working?
That’s where a compliance gap analysis comes into play. A gap analysis takes an in-depth look at your processes, systems and people to identify any risks or weaknesses that could potentially violate compliance laws.
Use this guide to set the scope of your gap analysis, compare existing controls with regulatory compliance requirements, make a plan of action and track your firm’s progress.
3. SEC adopts amendments to Form PF: The impact on private funds
Back in May, the SEC adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds.
With the revisions, large hedge fund advisers and private equity fund advisers that meet certain AUM thresholds are required to provide more current and quarterly event reporting.
Additionally, the amendments focus on improving the Financial Stability Oversight Council’s (“FSOC”) ability to monitor systemic risk and assess changes in market trends.
Find more information, plus a comparison of previous vs. new Form PF requirements, in this blog post.
4. Have you heard? 2024 SEC exam priorities are here
The SEC released its 2024 Exam Priorities in October, which outline critical focus areas for the coming year.
The priorities include general guidance as well as segmented focus areas by firm type, including:
- Investment Advisers
- Investment Companies
- Broker-Dealers
- Self-Regulatory Organizations
- Clearing Agencies
- Other Market Participants
For example, the SEC highlights duty of care and duty of loyalty obligations, annual reviews and conflicts of interest (among others) as areas of focus for investment advisers in 2024.
Take a look at what your firm needs to know.
ChatGPT’s artificial intelligence-fueled technology has many industries wondering how they can save time and cut overhead costs moving forward – but advisers will need to be wary of compliance concerns brought on by the new tool.
That’s not to say that ChatGPT and other AI can’t be useful for wealth management professionals. From generating code to analyzing a certain stock’s performance, the possibilities are real (and enticing).
On the other hand, information confidentiality, systems security and an over-reliance on automation can put your firm and clients at unnecessary risk.
Learn more about compliance considerations and ChatGPT.
The recent marketing rule update allows advisers to use testimonials as part of wealth management advertising and marketing initiatives – but there are caveats.
For example, all such testimonials require proper disclosures, whether the testimonials are published to your website, social media accounts, in traditional print media or any other format. Those disclosures will need to include information about the contributor’s client status, any compensation involved and any conflicts of interest.
Use this five-step guide to get familiar with testimonial disclosure requirements before launching your next 2024 marketing campaign.
7. Three core functions of a successful regulatory compliance program
All the rules and regulations that come with working in wealth management can make it easy to lose sight of the overarching goal – the why behind your compliance program. With that in mind, we’re reviewing three core functions of compliance, including:
- How it enables your business and builds trust with clients
- How it protects you and your firm’s reputation
- Why compliance is critical in maintaining ethics and integrity in the financial industry
Whether you’re training new staff, building a culture of compliance or just want a quick primer to help you refocus, here’s a reminder of how regulations benefit both advisers and the individuals they serve.
8. How to document your annual compliance review
Did you know that 37% of compliance professionals have difficulty finding time to dedicate to the annual compliance review process?
That number becomes more concerning with the SEC’s new annual compliance review documentation rule, which is designed to help regulatory agencies “determine whether the adviser is maintaining its policies and procedures correctly.”
Moving forward, firms will need to provide written documentation of their annual review at least once per year – although no specific formatting or method has been given by the SEC.
We’ve outlined three steps your firm can take to successfully document your review, as well as other key information to know.
9. Day one of COMPLYConnect 2023: Valuable insights about the marketing rule and cryptocurrency
The 2023 COMPLYConnect Conference brought together more than 200 industry experts from across the country, with session topics ranging from the updated Marketing Rule to the highs and lows of cryptocurrency.
Take a look at the top ten takeaways from day one of the conference in this post-conference roundup.
10. Direct broker feeds: The key to accurately tracking personal account dealing activity
Access to complete and accurate data is essential to employee monitoring. Without it, you may struggle to ensure compliance with your financial advisory firm’s policies and procedures, leaving your firm open to potential fines and penalties.
Explore how direct broker feeds can help you implement employee monitoring by identifying potential issues with personal account dealing, prioritizing security and more.
Let these blogs inform and guide your firm’s regulatory processes in 2024 – and be sure to check back in for even more helpful content, resources and updates on the ComplySci blog.
Enhance your compliance program with COMPLY
As the regulatory landscape continues to change in 2024, navigating compliance can feel like scaling a mountain – but you don’t have to do it alone.
Whether your firm needs a COMPLY consulting or technology solution or some combination of both, you benefit from tailored solutions designed to reduce the burden placed on your team and increase efficiency. With COMPLY as your partner in compliance, you can rest assured that your firm is complying with confidence.
Ready to navigate compliance with ease in 2024? Let’s talk!