Year-End Compliance Checklist for CCOs

November 29, 2018 by Sean McKeveny
Checklist for CCOs

Year-End Compliance Checklist for CCOs

With the holiday season here and year-end looming, the pressure is mounting to cross those final compliance to-do’s off the list and finish the year strong.

2018 has been filled with a number of regulatory updates and industry developments that may impact how year-end compliance tasks are prioritized and 2019 initiatives are set, including:

Regulatory rulings and changes

  • The SEC’s OCIE issued Risk Alerts regarding their continued commitment to examining matters important to retail investors, including mutual funds and ETFs.
  • The OCC indicated AML will be a focus on its list of FY 2019 annual priorities for OCC-regulated banks.
  • The MSRB published a revised set of FAQs regarding the application of MSRB Rule G-40 to advertising by municipal advisors.
  • The FCA outlined a number of observations relating to market abuse surveillance, serving as a reminder to firms to review their existing policies, systems, and controls in this area.
  • The SFC Fund Manager Code of Conduct (FMCC) went into effect for fund managers with operations in Hong Kong.
  • Regulators in both the U.S. and U.K. continued to focus on electronic communication oversight programs, which is likely increase in 2019.
  • The OCIE released a Risk Alert regarding the most common deficiencies cited in recent examinations of advisers’ compliance with their best execution obligations.
  • The FCA published papers on the extension of its Senior Managers and Certification Regime, whose purpose is to create a "culture of accountability" at all levels within regulated firms.
  • Digital assets, such as cryptocurrencies and other virtual coins and tokens, were a hot topic, receiving attention from several U.S. regulatory agencies such as the SEC, CFTC, and FINRA.
  • The SEC provided clarity and potential relief regarding one of 2017’s more controversial and debated regulatory updates on inadvertent custody.
  • The SEC voted to adopt amendments to Forms N-PORT and N-1A regarding the reporting and disclosure of liquidity information by open-end investment companies.
  • As of June, registered investment companies are required to file Form N-CEN with the SEC on an annual basis, replacing the semi-annual census reporting on Form N-SAR.
  • FinCEN’s Customer Due Diligence Rule (Ultimate Beneficial Ownership) went into effect in May, requiring all registered financial institutions to obtain identifying information from individuals controlling 25% or more of a company holding a corporate account.
  • The Small Business Credit Availability Act (“SBCAA”) was passed and signed into law as part of the Consolidated Appropriations Act, 2018. The changes made through the SBCAA are the most substantial regulatory changes to affect BDCs in years and are widely regarded by the industry as a boon for growth.
  • The SEC’s Division of Enforcement announced the Share Class Selection Disclosure Initiative.

Privacy Laws

Performance Updates

  • The release of the Exposure Draft of the 2020 Global Investment Performance Standards (GIPS®) forced firms to assess how the new requirements will impact their business from marketing and operational perspectives.

Brexit

  • UK firms have begun preparing contingency plans for a Brexit deal as the March 2019 deadline looms ahead.

What You Can Do

With the above and other upcoming developments in mind, ACA recommends that compliance professionals take the following into consideration as they work to meet their 2018 compliance obligations before year end as well as plan for 2019. We’ve developed the following checklist to help guide you through the key areas to consider as you head into 2019.

More Information

Join us on Thursday, January 10 at 11am ET for a live webcast The Compliance Year in Review. You’ll hear from ACA Compliance Group’s Lynne Carreiro and Erik Olsen about 2018 trends and developments and what to expect in 2019. Register here.

Questions?

For questions on completing end-of-year tasks or to learn more about how ACA can assist please contact your regular ACA consultant or Kelly Santos at ksantos@acacompliancegroup.com for more information.

 

About the Author

Sean McKeveny rejoined ACA in September 2014 to support the launch of ACA’s Analysis and Review Center (“ARC”) in Pittsburgh. Sean had previously worked as a Compliance Analyst in ACA’s Morristown, New Jersey office. After spending three and a half years in Pittsburgh, Sean returned to Morristown, where, as a Principal Consultant, he oversees select ARC projects, provides support during mock exams, and serves as a practice specialist supporting sales and business development initiatives for ACA’s business process outsourcing segment. Sean earned his Bachelor of Science degree in Business Management (summa cum laude) from the University of Scranton. He also holds the Claritas Investment Certification issued by the CFA Institute and a graduate certification in Strategic Decision and Risk Management from Stanford University.

 

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