Year-End RIA Compliance Checklist

With the end of 2021 quickly approaching, it’s time for RIAs and Chief Compliance Officers (“CCOs”) to start conducting their annual compliance reviews. These reviews are mandated under Rule 106 (4)-7 of the Investment Advisers Act of 1940 to include evaluations of RIA policies and procedures, as well as any internal controls that may prevent state or federal regulatory violations.  

RIAs and CCOs should begin asking themselves important questions about the adequacy of their compliance programs. For example, which RIA compliance procedures and policies worked for your team, and which did not?  

What to Look Out For in 2022

In the new year, examiners will be hyperfocused on how an RIA’s business continuity plan held up through the stresses of the pandemic over the last two years. Specifically, regulators will be evaluating any work-from-home challenges that RIAs and CCOs may have experienced or continue to have today. 

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An RIA’s annual analysis prompts amendments and additions that can help a firm better manage its risks. Corrective action to address those risks is then reflected in RIA or CCO compliance tasks for the year.

Most RIAs are required to file their Form ADV updates by March 31st, 2022. In preparation, RIAs and CCOs should review any material changes, such as assets under management, people, locations, and outside business activities

Enforcement Trends and Priorities

Due to ongoing enforcement trends and SEC and DOL/State priorities, AdvisorLaw will be paying special attention to three major compliance areas:

  1. Paycheck Protection Program (PPP) Loans — have all PPP loans been disclosed?
  2. Form CRS/ADV Part 3 — have they been properly formatted to SEC standards? 
  3. SEC Marketing Rule — are your advertising and solicitation disclosures compliant?

If you’re in need of guidance, AdvisorLaw’s RIA Compliance Team is here to provide a complimentary consultation, tailored specifically to your firm’s needs. 

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