NASAA Releases Top Line Report on Common Investment Adviser Compliance Deficiencies

The North American Securities Administrators Association (NASAA) issued the findings of a 2015 sample examination that uncovered deficiencies in various compliance areas.The data uncovered deficiencies in books and records practices. Other problematic areas for state-registered investment advisers were contracts, registration, fees and custody. The Report also provided guidance to assist investment advisers in developing sound compliance practices and procedures.

Among the recommended Best Practices to eliminate these deficiencies are:

• review and revise Form ADV and disclosure brochure annually to reflect current and accurate information. File amendments in a timely manner;
• prepare and distribute a privacy policy initially and annually; and
• provide a disclosure brochure to clients initially, then provide updates and offers to deliver afterwards as required;
• prepare a written compliance and supervisory procedures manual relevant to the type of business to include a business continuity plan;
• review all advertisements, including web site and performance advertising, for accuracy.