NASAA Lists Deficiencies Found in Coordinated IA Exams
The national organization of state securities regulators (NASAA) listed top deficiencies revealed in a series of coordinated state examinations of 825 advisers. NASAA cited the following problem areas: Form ADV disclosure, missing documentation of client suitability information, failure to safeguard client records, missing client agreements, lax supervision especially over remote offices, and advertising mis-statements on websites and client correspondence. NASAA also listed several deficiencies specific to hedge fund managers including valuation, cross trading, and conflicts of interest. NASAA recommends several compliance best practices. NASAA claims that it uncovered 3,543 deficiencies as compared to 1,887 deficiencies identified in a 2009 review of 458 advisers.
OUR TAKE: NASAA is flexing its regulatory muscles in anticipation of assuming regulation of advisers with less than $100 Million in AUM.