RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of April 29th, 2022

Posted by RIA in a Box

May 6, 2022 4:20:17 PM

This week's recap focuses on the Securities and Exchange Commission's ("SEC") examination priorities, cryptocurrency, and a recent SEC bulletin emphasizing serving clients' best interest.

Each week, we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser ("RIA") compliance and regulatory issues. This week's recap focuses on compliance guidance for small firms, the Securities and Exchange Commission's ("SEC") proposed Cybersecurity Rule, concerns with compliance with the Marketing Rule, preventing elder abuse, and increased regulatory attention on the cryptocurrency market. 


Here are our top investment adviser compliance articles for
the week of April 29th, 2022:

Download the Comprehensive Guide to RIA Compliance

    1. ComplySci and RIA In A Box Offer Compliance Tips to Small Firms and a Playbook for Compliance Officers (Author – Justin L. Mack, Financial Planning)

This article provides guidance to small financial advisory firms for efficiently managing meticulous compliance tasks. Will Bressman, President of RIA in a Box, discusses how an entire firm should be involved in building and maintaining a culture of compliance, not just the Chief Compliance Officer or small compliance team. Small teams can leverage technology to tackle compliance tasks that would otherwise involve an entire division. Compliance professionals can refer to the 2022 Chief Compliance Officer Playbook for information on recent regulatory activity and tips for maintaining an effective approach to compliance.

    2. 4 Ways SEC’s New Proposed Rules Put Cybersecurity Front and Center (Author – Thomas D. Giachetti, Think Advisor)

Thomas Giachetti highlights the impact of the SEC's proposed Cybersecurity Rule if it were approved, detailing the new requirements for RIAs and private fund advisors. To enhance cybersecurity preparedness and reduce cybersecurity risks, firms would need to design their policies and procedures to "(1) minimize and monitor user-related risks and prevent unauthorized access, (2) include measures to detect, mitigate and remediate cybersecurity threats and vulnerability, and (3) include measures to detect, respond to and recover from a cybersecurity incident." The article also touches on the requirements for maintaining specific books and records related to cybersecurity, and disclosing incidents to regulators, clients, and potential clients. 
 

    3. Advisors Face Difficulty Complying With New SEC Marketing Rules, Consultant Says (Author – Karen Demasters, Financial Advisor) 

The SEC Marketing Rule will go into effect in November 2022 for federally registered firms. However, the article shares how only a few state regulators have announced guidelines for compliance so far. Karen Demasters points out that this rule has left many advisors concerned with the time, resources, and manpower required to comply with the complex rule. Firms following the Global Investment Performance Standards ("GIPS") will have an easier time complying, as the requirements are similar to the Marketing Rule. These guidelines are voluntary standards that investment managers use to disclose fair representation of their investment performance.

    4. The Vital Role of Financial Advisors in Stopping Fraud and Elder Abuse (Author – Tobias Salinger, FinancialPlanning)

Tobias Salinger goes into detail about the responsibilities advisers hold for preventing elder fraud and financial exploitation. Within the article, he also discusses the specific points discussed during a recent webcast hosted by the North American Securities Administrators Association, ("NASSA"), including establishing a trusted contact to report potential financial abuse and to act with empathy when speaking to possible victims of scams. The article emphasizes the importance for firms to continuously train their employees on red flags and warning signs of elder abuse. 

    5. SEC Nearly Doubles Crypto and Cyber Enforcement Staff (Author – Patrick Donachie, Wealth Management)

With respect to the growing cryptocurrency market, the SEC is expanding its Enforcement Division to focus specifically on crypto assets and cyber violations. The SEC announced its plans to add 20 staff members, making 50 positions in total dedicated to the digital asset space. Based off the SEC's cryptocurrency risk alert issued in February, the industry can expect the staff members to focus on portfolio management issues, record-keeping, custody, disclosures and valuations. 

Download the Top Cybersecurity Tips and Best Practices

Don't forget to check out last week's top RIA compliance news articles that focus on developing a scalable compliance program, the North American Securities Administrators Association ("NASAA") Continuing Education Model Rule, ComplySci's 2022 Chief Compliance Officer Playbook, and conflicts related to the definition of fiduciary status. 

Topics: RIA Operations, RIA Compliance, RIA Technology

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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