The Top Five "Gotcha" Deficiencies Plaguing Asset Managers and How to Avoid Them

Client Advisory
March 1, 2017

Let’s start with this caveat: as we all know, under the still-new Trump Administration, priorities may and are likely to change. Now that we got that off our chest, it is nevertheless not the time to sit back and wait. The SEC’s Office of Compliance Inspections and Examinations (OCIE) has just given us a list of potholes that investment advisers keep falling into. 

The OCIE identified the top five deficiencies that it sees over and over when conducting investment adviser examinations. This is what you need to know and what you need to do to avoid these deficiencies.

Compliance Rules

Regulatory Filings

Custody Rule

Code of Ethics

Books and Records


Just because a lot of asset managers experience these same common problems is not an excuse. In fact, now that the OCIE has published its list of "pet peeves," if you are examined and it is determined that you suffer from many of the same deficiencies, your ability to remedy them may be limited. The OCIE is indicating that its patience for tolerating these types of deficiencies is growing thin and that it is more likely to try to move quickly to seeking enforcement actions. In other words, you have been warned.

If you would like help in assuring that you stay out of the SEC’s "cross-hairs," please feel free to contact Joel Telpner in New York (, 212.660.3015) or John Hunt in Boston (, 617.338.2961).

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