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  • Writer's pictureRita Rhodes

You Need to Document Your CCO Annual Review

Updated: Dec 31, 2023

Laptop, notebook, pen, glasses

In August, the SEC adopted some final rules pertaining to Private Funds. But wait ... before you think, "Oh, I don't have a private fund, this

doesn't apply to me," keep reading.

 

Buried within the release of these rules was an amendment to Rule 206(4)-7 of the Investment Advisers Act, commonly known as the Compliance Rule. This rule was first enacted about 20 years ago, and it is the rule that states that all investment advisers need to have a CCO, have written policies and procedures, and conduct an annual exam. But the rule has been tweaked just a bit to now state that the annual compliance review must be documented in writing. The rule becomes effective November 13, 2023, so all annual reviewed conducted by the CCO after that date will need to be documented in writing.

 

The rule doesn't specify how the annual review needs to be documented, so there is still some flexibility on how can be accomplished, depending on your business model. You can opt for a formal once-a-year compliance report, or otherwise document various reviews that are conducted throughout the year.

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