OCIE’s Risk Alert on Electronic Messaging: Four Key Steps Advisers Should Take (Part Two of Two)

After the SEC Office of Compliance Inspections and Examinations (OCIE) noticed an increase in the use of electronic messaging by investment adviser personnel for business-related communications, it conducted a sweep examination initiative to better understand the types of electronic messaging used by advisers and their employees; the risks of that use; and the challenges in complying with certain provisions of the Investment Advisers Act of 1940 (Advisers Act). The results of that initiative informed OCIE’s recent National Exam Program Risk Alert, which identifies practices OCIE staff believe may assist advisers in satisfying their obligations under both Rule 204‑2 (the Books and Records Rule) and Rule 206(4)‑7 (the Compliance Rule) under the Advisers Act. This second article in our two-part series explains four steps that investment advisers should take with respect to the best practices described in the Risk Alert. The first article analyzed how the Books and Records Rule and the Compliance Rule impact the ways in which advisers and their employees may use electronic messaging for business purposes, the sweep initiative that led to the Risk Alert and OCIE’s recommended best practices. For more on electronic communications, see “ACA 2018 Compliance Survey Examines Electronic Communications, Personal Trading and Corruption Risk (Part Two of Two)” (Jun. 14, 2018).

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