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Safeguarding critical information continues to top the list of compliance concerns for federally registered investment advisers – with 88 percent of respondents in a new survey identifying “cybersecurity/privacy/identity theft” as the “hottest” compliance topic for 2016.
While data and information security topped the list for the third year in a row, Anti-Money Laundering /Anti-Bribery and Corruption has taken on greater importance with compliance officers. AML/ABC was the second hottest topic, cited by 24 percent of respondents – triple last year’s eight percent.
Other areas of concern identified by respondents were Advertising/Marketing with 19 percent (down from 23 percent last year); Custody, with 10 percent (down from 18 percent); and Fraud Prevention, with 9 percent (down from 13 percent).
Compliance officers at a record 730 investment adviser firms participated in the 2016 Investment Management Compliance Testing Survey, a joint project of the Investment Adviser Association (IAA), ACA Compliance Group and the asset management holding company OMAM. Firms of all sizes responded, with 34 percent managing less than $1 billion, 43 percent managing $1 billion to $10 billion, and 23 percent managing more than $10 billion. Two-thirds (66 percent) of responding firms reported having 50 or fewer employees. The survey is now in its 11th year.
“The results of our 2016 survey should give investment advisers a strong sense of the compliance areas they may want to focus on,” said IAA Assistant General Counsel Sanjay Lamba. “Our hope is that our findings will assist firms in benchmarking their compliance practices against other firms.”
“The most striking aspect of the survey results is the continual improvements in controls and best practices adopted year over year by the respondents, as well as the nexus, or lack thereof, between those areas identified as posing the highest risk by the regulators versus the areas deemed to be higher risk by industry practitioners,” said Lynne Carreiro, Managing Director, ACA Compliance Group.
Added OMAM’s Senior Compliance Manager Amy Yuter: “The survey continues to demonstrate the significant commitment that advisers have made to continually enhance their compliance programs in an ever-evolving regulatory environment.”
ACA Compliance Group
ACA Compliance Group ("ACA") is a leading global provider of regulatory compliance products and solutions, cybersecurity and technology risk assessments, performance services, and technology solutions to the financial services industry. Founded in 2002 by former SEC examiners and state regulators, ACA develops and provides its products through a worldwide team of former SEC, FINRA, FSA, NYSE, NFA, and state regulators, as well as former senior in-house compliance professionals and technologists from prominent financial institutions. ACA serves a diverse base of leading investment advisers, private fund managers, commodity trading advisors, investment companies, and broker-dealers. ACA’s products include standard and customized compliance packages, cybersecurity and technology risk assessments, GIPS® verifications and other performance services, and a wide variety of technology solutions for financial services firms. For more information, please visit www.acacompliancegroup.com.
Investment Adviser Association
The Investment Adviser Association (IAA) is the leading trade association representing the interests of SEC-registered investment adviser firms. The IAA’s approximately 600 member firms collectively manage assets in excess of $19 trillion for a wide variety of institutional and individual investors. For more information, visitwww.investmentadviser.org or follow us on Twitter, LinkedIn, and YouTube
OMAM is a global, multi-boutique asset management company with approximately $218 billion of assets under management as of March 31, 2016. Its diverse Affiliates offer leading, alpha generating investment products to investors around the world. OMAM’s partnership approach, which includes equity ownership at the Affiliate level and a profit sharing relationship between OMAM and its Affiliates, aligns the interests of the Company and its Affiliates to work collaboratively in accelerating their growth. OMAM’s business model combines the investment talent, entrepreneurialism, focus and creativity of leading asset management boutiques with the resources and capabilities of a larger firm. For more information about OMAM, please visit the Company’s website at www.omam.com.
For the IAA: Herb Perone, 202.507.7215, firstname.lastname@example.org
For ACA: Lynne Carreiro, +44 (0)20 7042 0500, email@example.com
For OMAM: Amy Yuter, 610.578.1387, firstname.lastname@example.org