D.E. Scott Investment Management Compliance Services

Annual Compliance Reviews

The Advisers Act requires each registered adviser to review its policies and procedures at least annually to determine their adequacy and the effectiveness of their implementation.

Our unique blend of SEC examination and industry experience enables us to provide each client with a complete and useful review experience. Each engagement includes a thorough analysis of policies and procedures against actual practices and SEC expectations. Where potential gaps are identified, we offer our clients practical solutions consistent with the real-world challenges facing active investment managers.

Our annual compliance review includes analyses of policies and procedures, interviews with key personnel, and sample testing of selected working documents. The areas covered may include, but are not necessarily limited to, the following:

  • Marketing practices and performance composites;
  • Portfolio holdings and transactions;
  • Trading practices, including allocation methodologies, best execution, and affiliated transactions;
  • Soft dollars, including trading, products and services, and disclosures;
  • Portfolio valuation, including pricing procedures and fair valuations;
  • Investment allocation practices;
  • Compliance with portfolio guidelines and limitations;
  • Privacy policy and statements;
  • Code of Ethics procedures and reporting, including potential conflicts of interest;
  • Registration documents and other required filings;
  • Books and records requirements;
  • Custody practices;
  • Anti-money laundering policies and procedures; and
  • Other areas as may be required by your investment and operating activities.

At the conclusion of each review, we provide senior management with our Annual Review Matrix Report (“Matrix Report”). Each Matrix Report: (i) outlines applicable rules and regulations; (ii) provides details of our observations and findings; and (iii) sets forth recommended action items (including SEC expectations and "best practices").

D.E. Scott Investment Management Compliance Services

After senior management has reviewed the Matrix Report, we conduct one or more meetings, as necessary, to ensure that all affected parties share a complete understanding of the regulatory requirements, findings and observations, and recommendations (if any) included in the report.