Mock SEC Examination for Registered Investment Advisers

At Hardin Compliance, we offer a Mock SEC Examination especially designed for registered investment advisers. Our team helps you assess your firm’s readiness for an exam and identifies gaps in your compliance program. We advise your firm on potential weaknesses based on our most recent experiences with the SEC and your business model. We work with your CCO in performing an assessment of your firm’s readiness for a routine examination by the SEC.

The Process

Hardin’s Mock Examination process consists of:

  • Offsite review of books and records.
  • On-site interviews and record inspection.
  • Written report of findings (unless otherwise requested).
  • 20 hours of post-exam consulting.

Offsite Review

To start the process, we provide a document request list, similar to one the SEC’s Office of Compliance Inspections and Examinations (OCIE) routinely gives to registered investment advisers. We review these materials in our offices and become familiar with your firm’s lines of business, operations, and existing compliance program. This initial preparation allows us to efficiently use the time spent in your office reviewing your books and records.

On-site Examination

The on-site examination is designed to simulate a routine SEC examination, although with less stress and more feedback.

The on-site exam visit typically takes from three to five days. During this time, Hardin interviews firm personnel to assess their knowledge and their ability to confidently discuss with regulators the requirements of the Advisers Act, the firm’s compliance program, and all relevant SEC requirements.

We also evaluate whether your firm’s actual practices are consistent with its compliance manual and disclosures. Hardin’s team reviews the firm’s books and records to determine whether they are sufficient to meet the SEC’s requirements. During our on-site visit, Hardin staff provides immediate feedback and suggestions on how to handle an actual examination.

Presentation of Findings

After our on-site visit, we provide a written report detailing our findings (unless otherwise requested) along with recommendations for areas needing improvement. If preferred, we can present our findings via a conference call. Our Presentation of Findings can be delivered in whatever format your firm specifies.

Additional Consulting

In addition, Hardin Compliance delivers 20 hours of consulting for 60 days following the completion of the exam. This additional service is provided to help you fill any gaps in your compliance program discovered during the process.

Areas Reviewed

Typically, our mock exam focuses on current regulatory “hot buttons,” as well as standard focus areas, including:

  • Annual Compliance Review
  • Compliance Manual Review and Updates
  • Compliance Training
  • Risk Assessment
  • Employee Interviews
  • Email Review
  • Record Retention
  • Regulatory Filings/Disclosures (Form ADV Part 1 and 2)
  • Code of Ethics and Personal Securities Transactions
  • Account Maintenance
    • New Accounts
    • Terminated Accounts
    • Client Agreements
  • Complaints
  • Trading and Portfolio Management Practices
  • Trade Allocations and Aggregations
  • Best Execution
    • Soft Dollars
    • Trade Errors
    • Portfolio/Account Compliance Monitoring
    • Principal Trades and Cross Trades
  • Valuation and Fees
  • Custody
  • Proxy Voting
  • Advertising/Marketing
  • Solicitation
  • Regulation S-P (Privacy)
  • Business Continuity/Disaster Recovery
  • Anti-Money Laundering

At the end of this comprehensive process, you will feel much more confident about your ability to deal with SEC staff, as well as your advisers’ understanding of how to handle an examination.

In addition, Hardin also offers on-site consulting services during an SEC examination, as well as assisting in the development of a response for any issues raised by the SEC in a deficiency letter.

Learn more by reading our article on How to Handle and SEC Interview.

For more information, call our main office at 724-935-6770 or visit our Contact Us page today.