As regulatory bodies wrap up year-end enforcements and adopt rule changes that will undoubtedly shape your compliance priorities in 2024, the relative calm of year-end is a great time to reflect on what compliance topics have been top of mind for industry professionals in the recent past.
Get started with insights and inspiration from our most popular blog posts of 2023, which ranged from common licensing exam questions to marketing rule enforcements and more.
RIA in a Box’s top 10 blogs of 2023
1. An overview of exempt reporting advisor (ERA) compliance requirements
ERAs aren’t obligated to register with the U.S. Securities and Exchange Commission (SEC) or state regulators, but are still subject to reporting and fee obligations.
You might qualify for an exemption as a Private Fund Advisor or Venture Capital Fund Advisor. In either of these cases, your regulatory requirements will differ greatly from traditionally registered RIAs.
In this blog, we’ve covered the basic compliance requirements ERAs will need to meet, including:
- SEC examinations.
- Abbreviated Form ADV submissions.
- Adherence to the Advisors Act.
- Code of Ethics.
- Policies on material non-public information.
2. Series 65 Exam prep: 10 frequently asked questions
The Series 65 exam, administered by the Financial Industry Regulatory Authority (FINRA) and created by the North American Securities Administrators Association (NASAA), focuses on regulatory and ethical aspects for Investment Advisor Representatives (IARs).
To help guide potential test-takers, we’ve rounded up ten common questions (and answers) about the exam. From registration to studying, this is a great resource to help you prepare for your Series 65 licensing.
3. What do RIAs need to know about the Series 66 license?
The Series 66 Licensing exam is a test for those who wish to become registered as both securities agents (representatives) and IARs. It’s a combination of the Series 65 exam (which is solely focused on investment adviser registration) and the Series 63 exam (which covers state securities regulations).
If you’re interested in taking the Series 66 licensing test or are preparing for the big day, this guide offers several pieces of key information that can help you along your journey, including costs, the registration process, exam content and more.
4. How to calculate investment advisor regulatory assets under management
Knowing your firm’s assets under management (AUM) isn’t just a good practice – you’re also required to report that number to regulatory authorities each year.
To help you make your calculations, it’s important to know what factors affect your total AUM, such as:
- Discretionary authority.
- Non-discretionary authority.
- Sub-adviser relationships.
- And more.
Find information on all of the above, plus private funds, family or proprietary accounts and other considerations at the link.
5. RIA top deficiencies, part 1: How to comply with the SEC books and records rule
We kicked off a blog series on top RIA deficiencies with the Books and Records Rule, which outline rules and requirements surrounding bookkeeping for RIAs.
Creating, maintaining and storing documents seems straightforward in theory, but in practice can easily overwhelm firms with a large number of staff and/or clients.
To help you refresh your knowledge and processes, this blog outlines what types of records should be documented, where advisers often go wrong and three steps you can take to better comply with the Books and Records Rule moving forward.
6. Proposed SEC rule 206(4)-11: Vendor due diligence and mitigating risk at your registered investment advisory firm
The SEC’s proposed Rule 206(4)-11, also known as the outsourcing rule, would offer further protection for investors by requiring RIAs to satisfy specific due diligence elements before retaining a service provider to perform certain advisory services or functions.
Of course, vendor due diligence shouldn’t be a new process for your firm, but the new rule would likely increase compliance responsibilities.
To help you prepare for the potential rule, we’ve provided a vendor due diligence checklist for investment advisers, included in the blog linked below.
7. Can financial advisers have Google reviews? Compliance with the new SEC marketing rule
Is your firm advertising on Google? The SEC’s updated Marketing Rule makes allowances for Google reviews – but there are some caveats and considerations you’ll need to keep in mind.
For example, asking for user-generated reviews means you have no input into what those reviews will actually say, and you could be inviting negative comments. And the SEC doesn’t allow for “cherry-picking” – you have to ask all of your clients or none of your clients.
Explore how to get started with Google reviews, compliance rules to know and more in this RIA in a Box blog.
8. Why do RIAs need a CCO? 10 FAQs about the importance of RIA chief compliance officers
Every RIA is required to appoint an internal staff member as their Chief Compliance Officer (CCO). These leaders offer guidance, support and authority to your compliance program, helping to prevent potential errors and respond appropriately to real risks.
In this FAQ blog, learn about the role and responsibilities of a CCO, the average salary for the position, outsourcing options and more.
9. How can you complete your 2023 IAR CE credit requirements by the end of the year?
Under the IAR continuing education (CE) rules (introduced in 2020), certain advisers in participating states need to complete 12 credit hours through approved courses to maintain their registration. Those credit hours are split into six hours of Products and Practices content and six hours of Ethics and Professional Responsibility content.
End 2023 and kick off your 2024 education with the resources, tips and information in this blog, which includes online options and further information on reporting your completed credits.
10. The SEC’s new marketing rule: Updates and the first enforcement action
The updated marketing rule gave room for advisers to expand their marketing toolbox, but it also came with a whole new set of requirements – which the SEC are taking seriously.
In fact, the SEC charged nine firms with violations within months of rolling out the new rule. Those charges included advertising hypothetical performance to the general public on their websites without adopting and or implementing proper policies and procedures.
Learn more about the SEC’s enforcement actions, plus specific steps you can implement to avoid similar violations of the rule.
As you review your compliance program and make plans for improvement in 2024, this list of our top blogs of 2023 offers a guide for keeping your team on the right path forward.
Enhance your compliance program with COMPLY
The regulatory landscape is only going to keep evolving in 2024, and your firm has to stay ahead of the curb – but you don’t have to do it alone.
Whether your firm needs a COMPLY consulting or technology solution or some combination of both, when you partner with COMPLY 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!