This comprehensive session will examine the guiding principles that shape the framework of a sustainable compliance and supervisory program. Learn about the importance of creating a compliance mission statement that clearly identifies the functions and responsibilities of your firm’s compliance operation. In support of the compliance mission statement, senior management must articulate its vision and commitment to oversee and maintain the compliance program. Other elements that will be examined include:

• Assessment of the firm’s ability to implement and ensure compliance
• Comprehensive “gap” analysis
• Program transparency and comprehensibility to employees
• Separation of functions
• Escalation protocols
• Establishment of compliance committee or other deliberative body
• Compliance education and training
• Clearly distinguishing responsibilities and delegating
• Adoption and maintenance of clear and well-defined organizational charts

Turmoil in the financial markets, fraud scandals and related changes in matters such as valuation standards in recent years have brought a continuing spotlight on hedge funds by regulators, markets and investors and fueled a series of changes in market standards and expectations. Hedge fund managers and those who market hedge funds, and those managers and other fiduciaries who invest client money in hedge funds should be adjusting their policies and procedures to keep up and get ahead. Of interest to those involved with hedge funds and other private investment funds, this session will address the following issues:

• Valuation standards and controls: auditor and valuation agent roles, investor information
• New consequences of straying from disclosed strategies
• Side pocket arrangements
• Redemption and gate procedures
• Controls over the possibility of preferential treatment in redemptions
• Side letter policies
• Disclosure hot buttons
• Insider trading policies: reassessment in light of recent arrests
• Market shift in terms on fees, information flow to investors
• SEC investor verification issues
• Application of new custody rule to fund managers

Robert Plaze, Daniel Sibears, Denise Voigt Crawford
Rick Cortese (moderator)

The last decade has changed the game for compliance officers. SEC enforcement cases imposing liability on individuals who are CCOs have raised concerns that the scope of CCO liability is being expanded to include supervisory matters. Has the evolution of the position elevated liability? Have you done a personal liability assessment lately? Is your role within your firm properly aligned within the organization? Do you know where your personal risk lies? Hear from this panel on how to undertake a pragmatic assessment your potential exposure and steps you need to take now to mitigate personal risk.

SEC requests for records have never been more demanding or probing. A carefully developed document control program is crucial to the operation of any business and a rock-solid record management system is your best friend during an SEC examination. This panel will address electronic records, required retention and prudent destruction policies. You will learn of available resources to make the process fast and efficient. Most importantly, you will understand SEC expectations for responding to record requests in the wake of the Madoff scandal.

Chief compliance officers and compliance departments are responsible for working effectively with the trading department and understanding the trading process in order to implement the firm’s compliance program and performing annual reviews in support of the program. This panel on investment adviser trading will share insights on how compliance officers can gain an understanding of the firm’s trading practices, the life cycle of a trade, trade order management systems, best execution, broker selection and allocation issues. Other discussion points will include identifying conflicts of interest, recognizing trading patterns that should raise red flags, and avoiding soft dollar pitfalls.

The sale of fixed and variable annuities, especially to “seniors,” is an area that requires heightened supervisory attention and always seems to invite close regulatory scrutiny. This session will highlight FINRA rules regarding suitability and supervision, recent enforcement cases and industry best practices to designed to avoid sales practice violations.

While the meaning of most of the provisions of the SEC Cash Solicitation Rule (206(4)-3 is clear, solicitation arrangements also present a myriad of complex compliance issues, from investment adviser representative licensing to required conflict of interest disclosure. Many advisers fail to consider that their solicitation relationships are regulated by both the federal and state securities laws. Add to the mix that the definition and legality of investment adviser referral arrangements vary from state to state, and it comes as little surprise that advisory firms with otherwise diligent compliance departments often fail to recognize solicitation deficiencies. This overview will analyze:

• The intersection of state and federal law with respect to the definition of “IAR” and its potential consequences
• State requirements
• Rule 206(4)-3 bad boy provisions, due diligence and supervision requirements
• The issues associated with impersonal advisory services
• Affiliated solicitors, third-party solicitors
• Non-cash solicitation agreements
• SEC guidance on solicitation of interests in a private fund

Once again, this will be a conference favorite. The speakers will provide a cut-to-the chase discussion of compliance program forensic testing and analysis that will identify specific methods, examples and tools to support a testing program. The panelists will also walk through the SEC’s release on Forensic Measures for Funds and Advisers. Because examiners will expect to see the fruits of your testing program, recommendations regarding documentation of results and post-test remedial steps will be offered. Get testing right and you’ve got the best insurance policy against compliance malfunctions.

Panelists will provide a comprehensive update on Anti-Money Laundering regulations and prudent practices for Investment Advisers and Broker-Dealers. Practical recommendations will be offered towards mitigating risks, identifying red flags, and monitoring and reporting suspicious activity. Discussion areas include:

• AML Regulation and Enforcement Update
• Evaluating your firm’s AML risk
• What should Investment Adviser be doing now?
• How to assess your firm’s exposure
• OFAC: Developments/What is required?
• SARs: Latest trends related to filing, documenting and confidentiality
• SEC/SRO expectations
• Surveillance, and due diligence

This Blue Ribbon Panel of NRS IACCP designees will draw upon their vast reservoir of collective experience and success as compliance pros to diagram the qualities and capabilities that ultimately define a CCO’s effectiveness. The panel will break down the Compliance officer function into its constituent parts and share their play book for success. Some of the areas covered will include:

• Understanding and defining the compliance function within the organization
• Making effective use of resources
• Actively monitoring compliance implementation
• Taking steps to understand the firm’s business model
• Being proactive, skeptical , inquisitive, and supportive
• Positioning the CCO within the organization to exercise sufficient authority

Personal securities trading by advisory personnel inherently raises potential conflict of interest concerns due to the possibility that persons associated with the adviser may realize personal profit at the expense of the firm’s clients. Not surprisingly, SEC examiners have consistently focused on the internal controls that an adviser has adopted to supervise and monitor employees’ trading and this scrutiny will only become more rigorous in the current environment. The panel will offer examples of best practice controls and delve into the following topics:

• Surveillance of employee accounts
• Forensic analysis and comparing performance of client accounts to that of personal accounts
• Conflict of interest reviews
• Front running/possession of non-public information
• Excessive trading
• Holding periods
• Blackout periods
• Pre-clearance documentation and comparisons with actual employee trading
• Quarterly and annual certifications
• Maintaining restricted and watch lists
• Using time-stamped order tickets
• Bundling personal and client

This panel will address amendments to the advertising rules and how they impact firms with respect to communications with the public. Panelists will identify advertising risk areas, recent disciplinary actions and the implementation of effective supervisory procedures to avoid problems.

Advisers managing ERISA plans face new DOL requirements. Our invited ERISA expert will address the latest DOL proposals including new disclosure requirements in client contracts. You will hear the latest on gifts and entertainment guidelines as well as other disclosure rules that will affect adviser fiduciaries in 2010.

Large advisory firms face an array of special compliance challenges. In addition to being regulated under the Investment Advisers Act, they must typically contend with Investment Company Act of 1940, ERISA and, in some cases, foreign regulatory requirements. Because their size limits personal interaction with employees and the ability of compliance professionals to engage in face-to-face, hands-on monitoring, much of the oversight is delegated. Large firms often engage in many different activities and relationships at once and have institutional clients, such as mutual funds and retirement plans, creating a complex web of potential conflicts of interest and regulatory issues. Large firms also attract more probing and ongoing regulatory scrutiny. The CCO at a large firm often becomes involved with public relations and managing an ongoing dialogue with regulators. The panel will address these and other topics specific to large firms and offer relevant best practice solutions.

Advisory and Broker-Dealer firms cannot conduct business without gathering and maintaining customer information. This information is considered a firm asset and because of the harm that can be done if the information falls into the wrong hands, the regulators are mandating strict controls and procedures. This session will discuss the basics of information security policies and how to ensure your firm’s policies map to your own institution's risk profile. Other areas covered will include;: status report on SEC Reg S-P safeguarding proposal; implications of new SEC Reg S-AM; the FTC Red Flags Rule; survey of Massachusetts and other state data protection and breach notification requirements; responding to information security breaches and vendor management best practices.

An intermediate level ethics workshop utilizing scenario-based training and discussion groups to engage attendees in analyzing and responding to real-world ethical dilemmas confronted by both them and various members of their firms.

Advertising is one of those areas that continually appear on the list of areas subject to SEC examination deficiencies. The focus of this session will be recent SEC examination findings with the goal of identifying specific actions you can undertake at your firm to avoid similar problems.

This panel will review the changing regulatory environment impacting the scope of internal audit compliance including branch supervision requirements, contents of branch audits, audit scheduling, determining appropriate supervisory structures and the update process for branch audit policy.

An intermediate level ethics workshop utilizing scenario-based training and discussion groups to engage attendees in analyzing and responding to real-world ethical dilemmas confronted by both them and various members of their firms.

An adviser’s firm’s best defense is indisputably disclosure of material information about its business and its actual and potential conflicts of interest. Form ADV Part II is the prism through which regulators will initially assess your firm. This session will identify common ADV Part II related deficiencies and closely examine the elements of an accurate and “firm appropriate” disclosure document. This peer learning discussion session will aid you in determining whether your current disclosure document is effectively serving both the client and the firm as intended.

Friends and profiles, professional networking, micro-blogging, Facebook, LinkedIn and Twitter must now be addressed in your compliance program. Are your employees using firm premises and equipment to communicate with clients in the social networking environment? Is e-marketing being conducted? What about the confidentiality of firm and client information? This panel will bring you up to speed on these communication portals, the risks they pose and regulators’ expectations regarding oversight and supervision.