Mock SEC Examination
Going through a mock exam will help your team
- understand the process,
- familiarize with the request list, and
- gain confidence being interviewed.
Plus, a deep dive from a third party with a fresh set of eyes can save you a lot of time, money, and headache when the SEC comes knocking.
- lack of written procedures
- inconsistencies between what your procedures say you do versus actual practices
- inconsistencies from one document to the next
- lack of documentation to show you’re following your procedures
- inadequate or misleading disclosures, etc
But when you’re knee deep in the day-to-day work, it’s easy to overlook them.
We prepare you for the most stringent exam, and hope for the least.
- Request documents, just as the SEC would
- Use the initially requested documents to
- begin reviewing books and records remotely
- identify individuals to interview while on site
- select a sample of accounts for further review
- request additional documents that pertain to the sample of accounts
- Visit your office to
- interview key personnel
- provide immediate feedback and suggestions
- continue reviewing books and records
- evaluate the office from an information security prospective
- provide an overview in the form of an exit interview
Our office visit ranges anywhere from 3 to 5 days and includes a team of at least two professionals.
The examination is based on the most current SEC request lists, as well as those areas that the SEC has identified as the major areas of focus in the adopting statement to Rule 206(4)-7 and current focus areas. These focus areas may include:
- Gap analysis of firm compliance documents
- Portfolio management processes
- Trading practices
- Proprietary trading of the adviser and personal trading activities of supervised persons
- Disclosures made to investors, clients, and regulators
- Safeguarding of client assets from conversion or inappropriate use by advisory personnel
- Creation of required records and their maintenance, secure from unauthorized alteration, use, or destruction
- Marketing advisory service
- Processes to value client holdings and assess fees based on those valuations
- Protection for the privacy of client records and information
- Business continuity plan
After the Exam
If requested, a written report will be provided shortly after the visit. For a period of up to six (6) months following the review, Focus 1 will provide consulting related to the areas covered within the review and continued access to our publications and presentations, including:
- FOCUS resource – Periodic email notifications on:
- Changes to rules and regulations
- IM guidance, risk alerts, and no-action letters
- Enforcement Action Highlights
- Compliance program and best practice tips
- Focus 1’s perspective on current hot topics
- Notable Events
- FOCUS webinars – quarterly webinar presentations on current hot topics and RIA compliance education
TWIN Capital Management, Inc.
“Linda, I wanted to share the results of our SEC exam with you.”
We have completed our examination of certain books and record of Twin conducted pursuant to Section 204 of the Investment Advisers Act of 1940, and no further action by Twin is required.
“I couldn’t have done it without you – thanks for all your help through the years!”
James D. Drake, CPA
Chief Financial Officer/Chief Compliance Officer