Conquering Current Compliance Challenges
Nov. 14, 2018 | 2:00 - 2:30 PM EST

Ethics: The Compliance Officer’s Role in Encouraging Your Firm
to Do the Right Thing

Oct. 23, 2018 | 2:00 - 3:00 PM EST
 
RECORDED WEBINARS

Conquering Current Compliance Challenges
Recorded: October 10, 2018 
 
HANDBOOKS
  Includes: 9 Best Practices, 3 Proposed Disclosure Mockups
and a 60-minute Audio Webinar

The Adviser's Guide to SEC Advertising and Marketing Rules
Includes: 23 Best Practices, 5 Peer-tested tools and 15 No Action Letters

The SEC Examinations Priorities Handbook
Includes: 28 Best Practices, 20 Document Request Letters and 6 OCIE Risk Alerts

Cybersecurity Strategies to Ensure SEC Compliance, 2nd Edition
Includes: 24 Best Practices, 16 Tools, 4 Risk Alerts and IM Guidance

 
TRADING OVERVIEW
Trading is the heartbeat of most advisory firms – and an area compliance must monitor.
 
Pitfalls exist aplenty. Insider trading. Trading ahead. Unfair trade allocations. Expensive executions. And many more.
 
Advisers Act rule 204A-1 (codes of ethics) expressly mentions the “chief compliance officer” in relationship to obtaining access persons’ quarterly personal trading reports, a key duty under federal law.
 
Fiduciary duty
The overriding principle commandeering this topic is an adviser’s fiduciary duty. While the Advisers Act doesn’t mention fiduciary duty, it is a well-established principle dating to a 1963 U.S. Supreme Court ruling in the SEC v. Capital Gains.
 
Decades later, regulators continue to struggle with how to define what fiduciary duty means. It’s generally taken to translate that an adviser is to operate with the client’s best interest at heart.
 
Applying this standard to trading and you can see that favoring one client over another in multiple allocations over time could be seen as tarnishing that standard. Or maybe it’s directing trade executions to an affiliated broker-dealer even though it charges higher transaction costs.
 
Disclosure, recordkeeping and best execution are hot topics in this area. Other relevant Advisers Act rules include books and records, rule 206(3)-2 (agency cross transactions), Rule 206(3)-3T (principal trades) and rule 206(4)-2 (custody).

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