After five months of review, the SEC’s Office of Compliance Inspections and Examinations (OCIE) has released a Risk Alert regarding compliance and process protocols during the era of COVID-19. As the pandemic continues, investment management firms have been challenged to maintain the high-quality service and standards their clients and the SEC demand.
The OCIE Has Identified Six Areas of Concern
Firms should take time to review:
- (1) protection of investors’ assets
- (2) supervision of personnel
- (3) practices relating to fees, expenses, and financial transactions
- (4) investment fraud
- (5) business continuity
- (6) the protection of investor and other sensitive information
In this series, you’ll get a detailed breakdown of each of these six areas of concern.
The Protection of Investors’ Assets
Asset management firms have always been required to protect investors’ assets. The COVID-19 pandemic has seen a rise in identity theft aided by inadequate remote verification procedures. Firms should consider instituting heightened review of processes that involve investor asset movement such as check processing and transfers. OpsCheck’s versatile checklist notifications can automate notifications and confirmations for both the firm and the client when assets move—alerting all parties to the successful performance of normal business while also protecting against unauthorized transactions.
By instituting added layers of identity verifications through automation, firms can use OpsCheck to track their disbursements and their verified destinations. With so many clients making unusual and unexpected withdrawals from accounts due to the pandemic—especially from retirement accounts—firms need to confirm that their clients’ personal data is up-to-date and secure from outside manipulation whenever possible.
Help Eliminate Delays
With reduced staffing inhouse, many firms have experienced delays in processing hard-copy paperwork—such as check processing. Firms should review their workflow in these areas and offer clients a means to monitor their progress as well. OpsCheck can be tailored to allow clients access to need-to-know data such as receipt of checks, verification documents, or any other hard-copy materials that might experience delays over previous processes. Critical to this new attention, firms should make sure that they have trusted contact information from all their clients and a secure procedure from any changes that today’s environment might call for.
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