SEC Compliance Insights for Registered Investment Companies

By Michael Patanella, Andrew Surgan & Charmone Adams, Grant Thornton

Keeping up with compliance requirements is always a critical imperative in the highly regulated registered investment company (RIC) sector.

As 2022 comes to a close, four risk alerts published in this calendar year by the SEC’s Division of Examinations staff (Division) provide important guidance for RICs to consider as they work on their compliance initiatives. The risk alerts highlight the results of a series of examinations that focused on private funds advisers to assess industry practices and regulatory compliance in certain areas that may have an impact on retail investors.

The Division refers to this testing as “RIC Initiatives.” The scope of the examinations was generally focused on compliance policy and procedure effectiveness, disclosure by the funds to investors, and fund governance practices.

The results of the SEC’s risk alerts highlight deficiencies that affect all private fund advisers. The Division believes the observations should be reviewed to assist all funds and their advisers in assessing compliance risks. In response to these observations, organizations should consider revising their compliance policies and procedures, amending disclosures, and updating practices.