Registered Investment Advisers (“RIAs”) operating under the SEC’s jurisdiction face rigorous regulatory scrutiny and the team at RQC are finding that an increasing number of advisers are turning to external specialists to support them in proactively addressing any risk areas.
An external compliance review is one of the most effective tools to ensure compliance readiness, identify weaknesses and build a robust compliance framework that can withstand the scrutiny of an SEC examination.
What does a review entail and why is it useful?
A compliance review replicates an official SEC examination and is aimed at supporting advisers to identify and rectify potential regulatory gaps in compliance methodology and record keeping. SEC examinations are extremely thorough, covering areas such as governance structures, compliance policies and procedures, marketing materials, conflicts of interest, allocation of investment opportunities, fees and expenses, and employee conduct.
RQC’s compliance review process aligns closely with SEC methodologies, offering advisers a clear understanding of what to expect from the SEC.
The review process
We will undertake a risk-based review of your firm’s compliance program and seek to identify any gaps or weaknesses in relation to compliance with the Investment Advisers Act of 1940, the SEC’s expectations, and industry best practices. RQC looks to understand the main conflicts of interest and areas of risk to the business. This may relate to a firm’s structure, governance, compliance frameworks and investment strategies.
To mirror the SEC, RQC will then issue a formal document request list. This is a valuable learning process for future regulatory requests. The detailed document request list will comprise of the standard records expected from an investment adviser alongside documents relevant to the areas that may have been determined to be of heightened risk. The documents requested could cover monitoring and risk, client and vendor communications or internal processes; the SEC list is vast and comprehensive.
To continue preparing your firm for an actual SEC examination, our review will guide key members of staff through the various elements of the process, including interview preparation and specific feedback based on the evidence of internal compliance documentation and testing. We aim to determine if a firm’s procedures are consistent with written policies.
The interviews identify employees’ understanding of compliance requirements across varying levels of supervisory responsibility. They cover all aspects of a firm’s business and include individuals from senior management, risk and compliance, operations, IT, finance, marketing, and investor relations.
Specific feedback and findings are then delivered to your firm following an exit interview where we discuss our high-level findings and any remedial action.
Get ahead of the game
Our team can objectively evaluate your firm’s compliance effectiveness, a clear advantage ahead of the SEC conducting an examination.
Firms often struggle to evaluate their compliance effectiveness internally due to familiarity with their own policies and procedures, complexity of the regulations or resource limitations. Our independent review will deliver insights that highlight compliance gaps while offering precise and useful recommendations tailored to your firm’s specific GRC business operations. Crucially, we will continue to support your firm through the remediation process, actively helping implement recommended changes.
Performing reviews regularly – ideally every two years – ensures your firm remains consistently prepared for any potential regulatory examinations.
Why RQC?
Our compliance reviews are tailored to your firm’s unique size, structure and complexity. Partnering with RQC means not just identifying gaps but actively addressing them.
Contact us to discuss how we can support your business.
