Annual Reviews Risk Assessments

On-Site Compliance Reviews And Evaluations

Through the annual review process, MAH Advising, LLC (“MAH”) assists businesses in taking the proactive measures needed to identify and evaluate areas of risk as well as test the effectiveness of the procedures and policies that address and manage those risks.

We perform targeted, on-site, or remote risk assessments, as well as annual reviews, at the corporate headquarters, branch offices, and non-branch office locations for your company upon request. Our lawyers and staff will conduct custom reviews as part of the procedure to assess every aspect of your company that must comply with regulations, such as:

  • Corporate records and books
  • Accounting ledgers
  • Transaction and trading records
  • Investment policy statements and new account applications
  • Customer complaints and arbitration proceedings
  • Documents of related parties and representatives
  • Marketing and advertising materials
  • Written policies & procedures manuals
  • Firm registration records
  • Privacy notices and client disclosure documents
  • Anti-money laundering program, Business Continuity Plan, S-P controls, and other cybersecurity safeguards
  • Client contracts and account files
  • Supervisory compliance controls
  • New products and services, including controls for monitoring business development and transactions

MAH provides a research results report that discusses any crucial issues that must be addressed immediately after the risk assessment and/or annual review is completed. 

We classify risks as high, medium, or low, so you know where to emphasize your internal control efforts more. After that, we will collaborate closely with you to create a compliance calendar that lists action items in order of priority and specifies when enhanced controls will be put into place.

GAP Analysis And Annual Reviews

All SEC-registered investment advisers must conduct annual reviews. A registered investment adviser is required by Rule 206(4)-7 of the Investment Advisers Act of 1940 to conduct a yearly review of its policies and procedures to make sure they are suitably constructed to prevent violations of federal and other securities laws.

Similar to this, a registered Broker-Dealer (BD) with the Financial Industry Regulatory Authority (FINRA) is required to carry out testing of the firm’s supervisory procedures and controls at least annually (referred to as a “gap analysis”), which is used in part to create and complete the Annual Certification Requirement in accordance with FINRA Rule 3130.

The team at MAH will assess and test the following areas of your company for risk as part of an annual review and/or gap analysis including:

  • Regulatory filings and registrations
  • Client disclosures
  • Portfolio management (as needed), operations, and trading
  • Previously identified conflicts and risks
  • Cybersecurity and privacy
  • Business Continuity Plans (BCP)
  • Security measures against money laundering
  • Fee billing and appraisals
  • and much more

The team at MAH has a thorough understanding of business nuances and keeps up with recent industry developments in order to identify and address weak points in your firm’s compliance program.

Compliance Marketing Reviews

The Investment Advisers Act prohibits “any practice that operates as a fraud or deception upon any client or prospective client.” Over the past 75 years, this language has given little guidance to investment advisors across the US. Regulatory exams or specific no-action letters from regulators are frequently the only ways for firms to learn what is and is not permissible. This makes following the law difficult.

The following parameters can be used by MAH Advising, LLC (“MAH”) to evaluate your client newsletters, marketing materials, social media posts, and firm advertisements:

  • Investment Advisers Act of 1940 
  • Securities Exchange Act of 1934 
  • Rule 206(4)-1 (SEC advertising rule) 
  • SEC no-action letters and guidance statements 
  • Financial Industry Regulatory Authority (FINRA) broker-dealer regulations 
  • Global Investment Performance Standards (GIPS®)

We also advise creating internal controls for the marketing review process and submitting requests for no-action relief compliance through disclosure. Our attorneys are prepared to assist and have years of experience conducting advertising and marketing reviews.

Electronic Communications And Social Media

Social media is transforming both the world and how we do business. However, there are numerous regulatory compliance issues to consider before using social networking sites. The regulatory examination of risk management controls at financial firms is increasing as social media use by investment firms does. MAH can help you develop internal controls to reduce potential risks associated with using social networks.