The Dreaded “C” word – yes, Compliance

As we approach the end of the year, it’s a good time to take a look at your compliance manual and review it for accuracy and completeness.

If you use a compliance service such as compliancemax (www.compliancemax.com), now owned by NRS or ncsonline (www.ncsonline.com) (I cannot stress enough the importance of outsourcing this time consuming yet vital task), then you have (hopefully) completed your monthly checklists and are in good shape for the coming year.  The only thing you need to do is get your fees to the IARD and update your ADV if necessary.

If you do not outsource this function (seriously, why not, these services are very cost efficient), then you will need to go through your manual and make sure that you have done everything it calls for the CCO to do.  If it says you are doing something, then make sure you are doing it AND documenting it or if you’re not, take it out.  When it comes to compliance manuals, more is not always better.  If it’s in there, you’d better be doing it.  If you’re not doing it, don’t put it in there (unless of course it’s something required by the Securities Act).

Another tip…set up your compliance files electronically in one folder named “compliance” and then set up as many subfolders as you need such as “trade error” file.  Even if you don’t have any trade errors to document, put a document in it that says “there are no trade errors to document”.  By putting all the folders and files together, you can easily give them to an auditor in hard copy and electronic form and get them out of your office as quickly as possible.  Fumbling around for files and documents is a “no-no” when it comes to being audited.

Take some time now…you’ll be glad you did when the auditors coming knocking.

Call me if you’d like to talk about your compliance program.  Thanks!