The SEC recently issued an order underscoring the Atkins administration’s focus on marketing accuracy, robust recordkeeping, and effective compliance oversight.
Key SEC Findings
The SEC identified several compliance deficiencies in its order:
- Misleading Marketing Claims: The firm advertised that it “refuse[d] all conflicts of interest,” which the SEC found to be unsubstantiated. In reality, the firm disclosed various conflicts in its Form ADV Part 2A, rendering the claim misleading according to the Marketing Rule (Rule 206(4)-1).
- Recordkeeping Failures: The firm failed to retain required copies of its advertisements, including prior versions of its website. This violated the Books and Records Rule (Rule 204-2(a)(11)), which mandates advisers maintain all advertising records.
- Compliance Oversight Gaps: The firm did not conduct its required annual review of compliance policies and procedures and lacked adequate controls for relying on third parties for recordkeeping. These failures breached the Compliance Rule (Rule 206(4)-7).
Different Administration, Similar Priorities
Although the Atkins administration takes a different approach to the previous one, the SEC continues to prioritize compliance with the Marketing Rule, Books and Records Rule, and Compliance Rule. This action reflects the SEC’s continued focus on holding advisers accountable for the integrity of their communications and the strength of their compliance programs.
What Firms Should Do
We recommend that firms:
- Review marketing materials to ensure they can substantiate all promotional claims.
- Retain required books and records, including advertisements and website versions.
- Complete annual compliance reviews and promptly address any findings.
If you have any questions about these requirements or need assistance implementing effective compliance frameworks, ACA’s expert advisors can help.
Comply with SEC Requirements
The regulatory landscape is continually evolving. At ACA Group, we offer a comprehensive suite of advisory, managed services, and technology solutions designed to help you build, oversee, and maintain a best-in-class SEC compliance program.
- Compliance Advisory and Consulting Services: Whether you need ongoing support, or temporary help in one area of your compliance program, our team of 300+ compliance professionals, including 60+ former regulators, can help you decipher and comply with regulatory requirements.
- ComplianceAlpha®: Our award-winning regulatory technology (RegTech) platform helps optimize your compliance program with modules that:
- Automate compliance tasks, approvals, and training.
- Archive advertisements, websites, and other books and records in a manner that is easily searchable and compliant with the SEC Rule 204-2.
- Capture specific web pages and their linked content at configurable intervals, preserving their appearance in PDF and securely archiving them for surveillance and retention.
- Streamline audits and reports across the compliance program making it easier to respond to regulator and investor inquiries.
- Managed Services: Improve efficiency and mitigate risks by outsourcing your marketing material and performance review obligations to our team of regulatory experts.
- ACA Signature: Choose the right combination of compliance advisory, innovative technology, managed services, and cybersecurity to create a scalable solution as you navigate emerging compliance and risk challenges.
Contact us to learn how we can help you meet your SEC requirements.