The SEC recently released its findings relating to exams of investment advisers. https://www.sec.gov/ocie/Article/risk-alert-5-most-frequent-ia-compliance-topics.pdf.
In particular, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) found weak compliance programs; insufficient or late filings; custody rule violations; Code of Ethics problems; and the often used books and records issues. OCIE, in fact, criticized the use of non-particularized, “off-the-shelf” manuals, nearly non-existent annual reviews, and plain and simple failure to implement or follow procedures. Form ADV and Form PF filings also included inaccurate information or were late. Investment advisers were also found to not have the requisite knowledge to follow the custody rule, its requirements, persons responsible, or adequate and readily available books and records.
Finally, RIAs should consider this release a warning shot. That is, the SEC staff will most likely continue to focus on these issues during its future exams.