Recent SEC action reminds investment advisers of importance of robust compliance program

Abstract

Purpose – The purpose of this paper is to remind investment advisers of the need for robust compliance policies and procedures in light of a recent SEC administrative proceeding in the case of IMC Asset Management, Inc. Design/methodology/approach – The paper describes discrepancies the SEC cited in IMC's compliance program and its chief compliance officer's (CCO's) performance, and recommends compliance policies and procedures that firms should review, including compliance staff training, experience and competence; appropriate number of compliance personnel; periodic review of policies and procedures; and attention to SEC examination findings. Findings – This matter follows several other settled cases, which were resolved in late 2011, in which the SEC alleged serious overall compliance program deficiencies and found that the CCOs at those firms did not devote enough time to compliance responsibilities. Practical implications – In light of the SEC administrative proceeding, investment advisers should consider the compliance program review measures recommended in this article. Originality/value – The paper provides practical guidance by experienced financial services lawyers.