Regulators Requesting More Complex Trading Data as Part of Investment Adviser Exams — What Your Firm Needs to Know

November 13, 2017 by Michael Lehman

Regulators Requesting More Complex Trading Data as Part of Investment Adviser Exams — What Your Firm Needs to Know

ACA staff have observed an increase in the amount and depth of trading data being requested of investment advisers by regulators prior to exams. We have also seen regulator requests for such firms' calendars of their expert or issuer meetings held by associated persons, as well as a regulatory focus on forensic testing after those meetings.

ACA Guidance

We recommend that investment adviser firms take the following actions to help prepare for a similar regulator request or potential regulatory exam:

  • Confirm that you have equivalent access to trading data, in particular that your IT department can accommodate a regulator request in a reasonable amount of time; 
  • Confirm that your firm's surveilled trading data is complete and not only a sample; and

Review your policies and procedures regarding forensic testing following all expert or issuer meetings held by associated persons.

How ACA Can Help

ACA's Decryptex® provides in-depth trade surveillance to help identify items of interest and non-compliant trading and investment activity. The solution includes a case management tool that can track and store emails, reports, and research related to each investigation. In particular, Decryptex can assist with forensic testing needs.

Resources

ACA Technology can provide the following resources upon request:

  • Sample reports that illustrate items of interest in the areas of MNPI and Fairness in Dealing;
  • A copy of the most up-to-date SEC request list; and
  • The Decryptex algorithms library.

Insurance Discount or Rebate - You May Be Eligible

ACA has been working to build relationships with certain insurance carriers and brokers that offer coverage to our clients. Part of our efforts include negotiating discounts or premium reimbursements for firms that obtain one or more of our eligible products, including Decryptex. More information

For More Information

For more information about Decryptex and to request the resources listed above, contact Michael Lehman.

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