By Peter R. Guarino
On November 4, 2024, the Division of Examinations (Exams) issued a Risk Alert titled Review of Certain Core Areas and Associated Documents Requested. This alert provides comprehensive insights into the fund examination process and includes an attachment detailing the types of documents and information typically requested by Exams staff.
The alert highlights staff observations on several core review areas, including:
· Fund compliance programs
· Fund disclosures and filings
· Fund governance practices
These insights aim to assist funds and their advisers in developing and enhancing their compliance programs and practices.
Additionally, this alert reiterates the staff’s observations from the October 26, 2021, Risk Alert (Observations from Examinations in the Registered Investment Company Initiatives) and the November 7, 2019, information on commonly cited deficiencies and weaknesses identified in recent examinations of registered investment companies. These previous alerts included findings on the effectiveness of a fund’s compliance program, disclosures, and fund governance, among other topics (Risk Alert: Top Compliance Topics Observed in Examinations of Investment Companies and Observations from Money Market Fund and Target Date Fund Initiatives).
Notably, it is concerning that even 20 years after the implementation of Rule 38a-1, some fund Chief Compliance Officers (CCOs) are still not preparing written reports for boards, conducting program testing, reporting violations, or enforcing policies and code requirements.
About Peter R. Guarino
Peter has over 35 years of legal, global investment management regulatory and compliance experience. In addition to his role as President of Maine-based Compliance4, LLC, he and the firm provide comprehensive and customized compliance consulting services to investment advisers, registered investment companies and private funds. Currently he serves as the Independent CCO for ETFs and other funds, as well as other advisers to registered funds. In addition to his compliance work, Peter has extensive business and administrative experience and served as the Chief Operating Officer of Merrill Corporation’s Investment Company Services division. Finally, Peter was Senior Counsel and Secretary at GT Global/LGT Asset Management in San Francisco. He began his legal career at The Dreyfus Corporation in New York. He is licensed to practice law in Massachusetts and New York. Peter received his J.D. from Suffolk University Law School in Boston and his B.A. from Rutgers University.
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