Recently, the SEC found a large fund complex in violation of sections 203(e) and 203(k) of the Investment Advisers Act of 1940 “…the company’s failure to establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of its business, to prevent the misuse of material, nonpublic information in connection with the company’s use of outside consultants as part of its securities research and analysis activities.”
While the company had appropriate policies and procedures for their employees, they failed to, “establish or maintain written policies or procedures for identifying outside consultants who – based on their functional roles and whether they had access to confidential information regarding the Funds – should be subject to oversight and controls carried out by its compliance department.
Compliance departments obviously must take the time to review their policies and procedures annually. Compliance policies also need to be living documents that get updated with evolving regulations as well as changes to the many facets of the businesses.
By implementing specific rules from your policies, the StarCompliance platform can detect, prevent, and report any potential violations of your policies. Our team can provide advice and guidance regarding compliance best practices and can help optimize the conflict of interest of your compliance program.
We offer high standards of vigilance and security, from our comprehensive pre-approval, management and case filtration features, to our detection, prevention and enforcement systems. The STAR application also offers a full audit record of every moment in the compliance process, giving you peace of mind in addition to cutting edge compliance technology.