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Overview
of our SEC Compliance Program
We
provide clients with a full array of compliance services
specially designed to meet their individual needs. Clients
have the option of selecting a package of services for
a fixed, annual fee, or they may call us for legal and
regulatory advice on an issue-by-issue basis for an
hourly rate. Either way, we want our clients to get
the advice they need in the manner best suited for them.
Whether large or small, new or experienced, we will
work with you to meet your compliance needs.
Key
Components
While
the scope of the service may vary slightly for each
Registered Investment Adviser, the core components of
the program include the following:
We
will visit your offices twice in the course of the year
to conduct on-site reviews of your operations in order
to monitor compliance with the Advisers Act and its
related rules and regulations. We will also review key
materials including your client agreements, compliance
manuals and Form ADV. In the course of a given year
we will test in the following areas:
- Advertising and Performance Reporting
- Agency Cross Transactions
- Best Execution
- Books and Records
- Client Referral and Solicitation Agreements
- Code of Ethics
- Conflicts of Interest
- Custody of Client Funds
- Direct Billing
- Directed Brokerage
- Insider Trading
- Personal Securities Transactions
- Portfolio Management
- Privacy Compliance
- Proxy Voting Procedures
- Soft Dollar Arrangements
- Terminated Account Review
- Trade Allocation Practices
- Trade Error Correction Practices
Following
each compliance review, we will discuss with you our
findings and recommendations. We will also assist you
in making any revisions to your policies and procedures
that you and we jointly believe are necessary. Our findings
will be presented in such a way as to maximize the confidentiality
protections afforded by the attorney-client privilege.
You will then have the choice of sharing the findings
with third parties (such as regulators) or not -- as
you see fit. We will be happy to discuss with you in
greater detail the strategic issues implicated in disclosing
such reviews.
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What's
Included
Obviously,
regulations change over time and typically expand. Regulatory
changes involving such issues as Anti-Money Laundering,
Disaster Recovery Plans and Form ADV revisions are already
on the horizon. As such changes occur, we will assess
the anticipated time required to implement and comply
with the new regulations. If the estimated time involved
is minimal, we will assist you with the work as part
of the agreed-upon fee. If compliance with the new regulations
requires substantial work, we will confer with you and
agree on an appropriate fee for the additional work.
- Telephone & E-Mail Consultations
You
will be free to call or e-mail us with compliance
questions whenever you need to at no additional
charge. If your question requires research or
further investigation, we will perform that work
without charge to you. Our pledge is to get you
the answers you need in a timely and useful fashion
- without the concern that "the meter is constantly
running."
- Annual On-Site Compliance Seminar
Once
a year, we will conduct at your offices a two-hour
compliance seminar for your staff at no additional
cost to you. The compliance seminar will be
tailored to the particular products and needs of
your organization, and can be scheduled in conjunction
with one of our semi-annual compliance visits.
- Timely Compliance Updates
You
will receive from us timely e-mails advising you
about breaking industry news and reminding you about
upcoming compliance obligations. The e-mails will
tell you what is happening, how it affects you and
what you need to know or do. You are then free to
call us with questions regarding any aspect of the
e-mail and its implications for your firm, all as
part of the service.
- Personal Assistance With All SEC Inspections
We
will assist you in all phases of any SEC examination
that occurs whether scheduled or not. To the extent
that you receive advance notice of an SEC inspection,
we will review the pre-exam request for documents
and advise you as you prepare for the exam. Regardless
of whether the exam is scheduled or not, we will
be available throughout the course of the exam to
answer questions or render advice as needed. We
also will be available to speak with the examiners
should the need arise. Finally, we will review the
results of the exam with you twice: once after the
SEC examination staff departs, and second, upon
receipt of the SEC's examination findings (sometimes
referred to as a "deficiency letter").
These discussions are critical because a timely,
voluntary adjustment to a questioned policy or procedure
can make all the difference in the eyes of a regulator.
- Free
Admission to National Compliance Seminar
Compliance
obligations are constantly changing. Accordingly,
we will arrange for a complementary admission for
you (or someone else in your organization) to attend
the "National Symposium on Investment Adviser
Regulation," a day-long conference held each
year in Philadelphia. The conference focuses on
current issues in investment adviser regulation
and features top officials from the SEC and industry.
We are confident that you will find this conference
extremely beneficial to your overall compliance
program.
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What
Isn't Included
- Litigation
- Formal legal opinions
- Mergers, sales or acquisitions of other entities,
and the creation of new funds or entities (such as
private investment funds)
- The drafting by us of key documents (e.g., ADVs,
marketing materials, client agreements, etc.) or extensive
re-drafting of such documents. We will be happy to
review and comment on any such documents that you
prepare without charge as part of the service.
- Customer complaints and employment disputes (beyond
the initial stage)
- General "corporate" legal advice
- Mutual Fund advice
- SEC investigations or enforcement proceedings
- New regulatory initiatives (these will be dealt
with by mutual agreement as they arise)
We
will be happy to discuss arrangements for performing
any such additional work that you desire, whether on
a flat-fee or hourly basis. The cost, however, would
be in addition to the annual fee agreed upon at the
beginning of the year.
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Fees
Because
our goal is to provide you with on-going compliance
services for a flat fee, the charge for the year will
be mutually agreed upon in the beginning, and one fourth
of the fee will be payable at the start of each quarter.
The fee - like the service - will be calibrated to the
size and needs of the particular RIA, and will be agreed
upon by both of us.
During
the course of the service, you will not be charged for
routine disbursements such as telephone and fax charges,
photocopying or computerized legal research. The fee
is all-inclusive.
(The
only exception is for travel-related costs incurred
in connection with visits to the offices of non-Philadelphia-based
clients. In the case of such visits, the charges will
be limited to actual out-of-pocket expenditures.)
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Guarantee
of Satisfaction
Your
satisfaction is our overriding concern. Accordingly,
we promise that if you ever become dissatisfied with
our service for any reason, simply notify us so that
we may promptly rectify the situation. If you feel that
we have failed to address the problem after a reasonable
period of time, you may terminate our agreement at that
point without any further obligation on your part. We
will even refund to you the prorated amount of any pre-paid
fees for that quarter.
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Benefits
to You
There
are tremendous benefits to be gained from such a service.
They include:
- Prompt
answers to your compliance questions, together with
the certainty of cost that comes with a flat-fee service,
i.e., no "surprises."
- A reduction in your current expenditure for outside
legal counsel, as well as a reduction in your staff's
compliance burden.
- The confidence of knowing that your most valuable
asset - your company's name and reputation - is being
guarded against the possibility of regulatory disaster.
- The protections of the Attorney-Client Privilege
and the Reliance-On-Counsel Defense (to the full extent
conferred by law).
- The benefit of access to the best practices employed
by other financial services firms and recommended
by top SEC officials.
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