CSS Blog

News, updates and analysis from around the world of compliance

How Can a Small Advisory Practice Economically Be as Cyber-Secure as Possible?

Cybersecurity is a risk that applies to firms both large and small without discrimination. Even very small advisory firms, which I’ll define as having one to five staff for purposes of this discussion, have a wealth of information worth safeguarding. Cybercrime is often a crime of opportunity. Hackers are metaphorically going door to door (computer … Continued

Will We See Liquidity Risk Management Programs in Europe Soon?

In an article posted by Ignites Europe, the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg declared that it has “stepped up its supervisory focus on the liquidity aspects that are related to the recent developments” of Neil Woodford’s flagship fund and H2O Asset Management, an affiliate of Natixis Asset Management. In the U.S., … Continued

How an LPA’s Definition of Organizational Expenses Can Connect to a Custody Rule Violation

For private fund advisers, fee and expense reviews are a cornerstone to a sound compliance program. The SEC repeatedly reinforces this axiom, and a recent SEC Settlement Order highlights how the lack of such reviews and the misclassification of expenses can lead to a Custody Rule violation. In this case, according to the Settlement Order, … Continued

Early Impressions on Regulation Best Interest, Form CRS

One week after the SEC adopted Regulation Best Interest and Form CRS, a Cincinnati roundtable hosted by Fort Washington Investment Advisors, Inc. Private Funds & Regulatory Compliance Manager Andre Rickman ran through early impressions of the new rules and their accompanying Interpretive Releases with a very interested group. CSS Regulatory Compliance Expert Greg Hotaling opened … Continued

SEC Adopts Regulation Best Interest, Form CRS; Also Issues Interpretive Releases on IA Fiduciary Duty and Solely Incidental Exception

By a 3-1 vote, on June 5, 2019, the SEC acted to provide a new regulatory framework to help retail, or main street, investors understand the distinctions between broker-dealers and investment advisers, particularly the standards of conduct owed by each. Opening remarks by SEC Chair Jay Clayton noted that as markets have developed over the … Continued

Reorganization of FINRA’s Examination Program Taking Shape

At FINRA’s recent annual conference in Washington D.C., President and CEO Robert W. Cook and Executive Vice President of Member Supervision Bari Havlik discussed, among other things, FINRA’s ongoing efforts to consolidate its Examination and Risk Monitoring Programs from three separate programs into a single one. The goal of the reorganization is to drive more … Continued

SEC Begins Cyber Sweep of Investment Advisers with Focus on Cloud Storage

A sweep of investment advisers is underway by the U.S. Securities and Exchange Commission, which has sent out many letters to firms over the last week requesting information about their use of cloud providers. The move could be part of the SEC’s Phase 3 Cybersecurity Exam Initiative, and is likely related to the April Regulation … Continued

What Happens When Your CRM is Breached?

Even your client relationship management (CRM) software may not be safe from hackers. That’s the lesson some advisers are learning after an announcement by CRM vendor Redtail that it discovered in March 2019 that its cloud-based software had left some sensitive client data publicly accessible. The data left vulnerable included first names, last names, addresses, … Continued

Introduction to SFTR ‘Cheat Sheet’

SFTR is designed to enhance transparency of Securities Finance Transactions (SFTs) for all financial and non-financial EU entities and, branches of non-EU entities. The reporting obligation begins 11 April 2020 for investment firms, followed by a nine-month phased approach for other firms. Need a quick introduction to the key details of the regulation? Download our … Continued

Even When SEC Rulemaking Slows, Your Compliance Manual Shouldn’t Stagnate

Maintaining tailored policies and procedures is a critical component of an adviser’s internal controls. Time and time again, we’ve heard regulators admonish the industry that off-the-shelf compliance manuals just don’t cut it. In today’s ever-shifting regulatory environment, does your compliance manual need a reboot? Although there has not been any significant rule making over the … Continued

Life Cycle Guidance for Service Provider Due Diligence

Engaging third-party service providers to perform key functions can offer an investment adviser access to state-of-the-art technology and solutions necessary to compete in today’s environment. Before entering into service provider relationships, advisers need to understand that while the function may be outsourced, the responsibility for the function still rests with the adviser. Firms engaging service … Continued

Takeaways and Tips Related to SEC Risk Alert on Regulation S-P

On April 16, 2019, the SEC released a Risk Alert providing a list of compliance issues related to Regulation S-P, the primary SEC rule regarding privacy notices and safeguard policies of investment advisers and broker-dealers. As with other risk alerts, these were deficiencies noted by OCIE in regulatory examinations. Though the deficiencies were fairly common … Continued

Refreshing the Annual Review Process to Address Business and Regulatory Risks

Rule 206(4)-7 requires each registered adviser to review its policies and procedures no less frequently than annually, to determine their adequacy and the effectiveness of their implementation. But what’s the best way to approach this review? How are other firms meeting this requirement? At the recent Ascendant Compliance Solutions Strategies 2019 Spring Conference in Miami … Continued

Suggestions on Global Threshold Monitoring

On the heels of several European events focused on shareholder and position limit monitoring, we shifted to Miami, Florida and the Ascendant Compliance Solutions Strategies 2019 Spring Conference for another engaging session on the subject. (For an intro to the topic, see our previous blog post here.) In many ways the discussions proved to be … Continued


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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

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