Monday, April 3 – Wednesday, April 5, 2017
The Ritz-Carlton Golf Resort, Naples
Revolutionizing Compliance: The Matrix Of Regulation, Operations & Technology
Pillars Of A Progressive Compliance Program
Good compliance teams focus on the present. Great ones look into the future, working to anticipate shifting rules and regulations as well as the corresponding responsibilities. Regulation of advisers has changed and expanded greatly in just the last few years, and promises to evolve further. Past approaches are no longer the most practical or economical. As a result, it’s time to revolutionize compliance processes. The goal of our conference is to empower you with dynamic strategies to affect necessary changes or improvements within your organization.
Conference panelists and keynote speakers are on the front lines of compliance, promising some of the most forward-thinking approaches to both current and developing issues that affect large advisers, small advisers and private fund advisers. You’ll hear from and interact with past and present SEC staff, current CCOs, seasoned regulatory attorneys, cybersecurity experts, Ascendant consultants and others.
Focus will be on topics both broad and narrow, allowing you to tailor a track to fit your specific needs.
- New SEC Priorities
- Business Continuity and Transition Planning
- The DOL Fiduciary Rule
- AML & Patriot Act Compliance
- Due Diligence of Third-Party Vendors
- Diminished Capacity
- Cybersecurity Risks
- Custody Issues
- RegTech Solutions and Benefits
- Depths of the SEC Exam Process
- The Most Recent Rule-Making Impacting Advisers
Ascendant’s conference is dedicated to providing a cutting-edge experience, with progressive solutions and takeaways for attendees to bring back to their firms.
Change is coming, from the new presidential administration, the SEC and other major regulators. If you’re ready to revolutionize your compliance approach to meet that change, join us.
SEC Exam Track
While investment adviser firms have been more diligent than ever in proactively rooting out compliance issues prior to SEC examiners ever reaching their doors, a call from regulators is an inevitability.
To help you navigate the exam process, Ascendant has developed a conference track with a singular focus. During the course of the conference, we’ll take you through a typical SEC exam journey, highlighting the lessons we’ve learned in the field alongside compliance teams just like yours. We’ll go through all essentials, from how to respond to the SEC’s information requests, to handling the in-person interactions, to the exit interview and responding to a findings letter.
Monday, April 3, 2:45-3:45pm – SEC Exam Part 1: The First Day Letter and Exam Preparation
Tuesday, April 4, 1:45-2:35pm – SEC Exam Part 2: What Happens When Regulators Are in Your Office
Wednesday, April 5, 9:45-10:45am – SEC Exam Part 3: The Exit Interview and Responding to a Findings Letter
8:30-9:00 Pre-Conference Registration 9:00-11:30 Pre-Conference Workshops (Concurrent)
A Mock Cybersecurity Exam (Workshop 1)
SEC examiners provide you with a cybersecurity examination letter. Are you prepared to respond to their questions? Do you have the records they want to see?
Whether it is a cybersecurity-focused examination or a broader risk-based examination whose focus has shifted to cyber, it is more critical than ever to present your cybersecurity posture in the best light, as well as to understand where your risks are from a business perspective.
Handle SEC examination questions covering:
- Data Loss Prevention
- Mobile Device Policy
- Outsourcing IT
Using the OCIE cybersecurity examination request list as a model, this workshop will simulate a regulation examination into a firm’s cybersecurity policies, procedures, controls, and risk management capabilities. Attendees will gain insights into regulators’ follow-up questions, how to respond to specific questions when your documentation may not be up to par, and ways to convey your firm’s strengths and weaknesses to the examination staff.
Incorporating Behavioral Ethics into Your Culture of Compliance (Workshop 2)
Traditional approaches of teaching ethics are no longer effective. Rather, incorporating behavioral ethics into all aspects of your compliance program brings to light the processes that lead good people to do bad things. To improve ethical decision-making, employees need to become more familiar with moral awareness and moral judgement.
Discover the ways external influences impair a person’s ability to identify ethical behavior, and how technology plays a role in a person’s decision-making process. Through case studies, become more proficient with the topic so you can enhance all aspects of your business, including operations and compliance.12:00-1:00 Conference Registration 1:00-1:10 Conference Kickoff: Welcome and Introduction 1:15-2:20 SPECIAL PRESENTATION: SEC Data Analysis of Investment Managers
The SEC’s use of data analysis informs its policy recommendations and enforcement efforts. Learn more about how this complex use of data should be addressed by compliance teams. 2:25-2:40 Meet The Compliance Solutions Providers 2:45-3:45 SEC Exam Part 1: The First Day Letter and Exam Preparation
Preparing for an SEC examination begins with understanding the process and knowing what to expect. Part 1 of Ascendant’s SEC exam track will help you prepare your firm for the inevitable examination.
When registered entities receive a call from the SEC advising them that it is commencing an examination of the registrant, they are often unsure of how to proceed. This session will discuss what to do when that call comes and how to respond to the SEC’s request for information. The panel will address:
- The initial phone call or contact from the SEC
- Identifying your response team – Management, Operations, Technology and Compliance
- Negotiating the scope of the SEC’s document request
- Organizing Responsive Materials – How do you pull the documents together, who reviews them and how are they produced to the SEC?
- Telling your firm’s story to an examiner – Who your clients are, what you do, and, just as importantly, what you don’t do
- Specific document requests – What is a consolidated trade blotter? How do you handle email production?
A Practical Guide to Helping Your Employees Safeguard Client Information
Worried about your employees clicking the wrong email? Concerned that your staff may be lax with safeguarding client data? Regulation S-P and an expanding universe of state privacy regulations mandate information safeguards for registered advisers, yet despite the regulations, your employees’ day-to-day practices may be putting the firm and its clients at risk.
- Aspects of a strong cybersecurity training program
- How simple, affordable, easy-to-implement steps can make your firm more secure
- Helpful, practical advice and checklists you can share with your staff, and with your clients, to help them stay safe on the Internet and away from cybersecurity issue for the adviser.
Marketing and Advertising: From Clover through Performance Advertising
The purpose of advertising is to convince customers that a company’s services or products are the best. But compliance must become the gatekeepers to ensure the firm represents itself to clients in a compliant manner. This session examines permissible advertising practices, and discusses the various supporting records that need to be maintained to support statements. Looking at recent SEC enforcement actions, the session will also address the importance of verifying the performance of third-party sources and records to be preserved.
Private Funds: Identifying and Managing Conflicts of Interest
Private funds and their investment advisers have multi-faceted relationships. Each relationship gives rise to actual or potential conflicts of interest. We’ll explore how to identify conflicts and manage or mitigate them, including those associated with:
- Allocation of Co-Investment Opportunities
- Fee and Expense Allocation Among Multiple Funds
- Fee and Expense Allocation Among Funds and the Adviser
- Accelerated Monitoring Fees
- The Use of Operating Advisers
6:30-7:30 Sunrise Yoga on The Green
We designed the Ascendant conference to feed your brain, packing it with vital information and the latest developments in compliance. But we haven’t forgotten the importance of balance in the equation, and how nourishing your body can strengthen your mind. Join us for yoga to refocus, reenergize and jumpstart your day.
Meet in the lobby at 6:25 to check in. Mats, towels, and water bottles will be provided.7:30-8:30 Breakfast 7:45-8:30 Discussion Groups (Concurrent)
Obtaining A Seat at The Table: Negotiating Skills for Compliance Professionals
Is compliance integrated into the core of your business? Are members of Compliance included in the decision-making processes? Compliance needs to partner with the business units and sometimes it takes great negotiation techniques to win over unit heads. Learn the skills needed to become an integral part of the organization.
Anti-Money Laundering and PATRIOT Act Compliance
Whether investment advisers are technically “financial institutions” for purposes of AML or not, they still have certain obligations to know their clients. This session will consider the current state of AML and PATRIOT Act rules. The group will discuss how to address such requirements through an AML program and policies and procedures.
ACM User Workshop
You know it, and you love it, but you need to learn more of it. ACM expands its capabilities every day. This session will leave current users with a greater understanding of its depth and breadth, as well as tips for efficient and effective usage in day-to-day compliance responsibilities.
Erica Orange & Jared Weiner leverage their collective experience as futurists working with some of the world’s largest companies to uncover several emerging trends for 2017 and beyond that are revolutionizing the future of compliance. Using macro sociocultural, economic and technological trends as a catalyst, they will talk about how the major growth areas of The Metaspace Economy® will uncover both the short- and long-term future growth opportunities of tomorrow, and how all will disrupt the current landscape as we know it today. 10:00-10:15 Meet The Compliance Solutions Providers 10:15-10:30 Networking Break 10:30-11:30 The Regulatory Landscape: The World According to Trump (General Session)
The elections of 2016 will have a profound impact on the legislative and regulatory landscape governing investment management firms. This panel will focus on developments and changes in Washington, DC that will shape the legal, regulatory, and compliance agendas on Capitol Hill, the SEC, and other regulatory agencies. We’ll discuss:
- What’s next at the SEC — including the composition of the ”new” SEC and key staff?
- What changes are expected in the SEC’s regulatory and enforcement programs?
- How will the elections affect the outcome of DOL and SEC fiduciary rules?
- What are the key trends in Private Fund Regulation?
- What is the outlook on Capitol Hill for the investment management profession?
Form ADV New Amendments – Big Data, Client Information, Social Media and Portfolio Information
Beginning in late 2017, Form ADV, Part 1As will begin to more closely resemble Form PF information. More Part 1 Items are enhanced for more information to assess risk and focus examination teams.
New ADV changes to be implemented in October 2017!
Operations will need to be engaged.
New information to gather and file:
- Portfolio Information by Security Type for SMAs
- More Specific Client Information
- Custodians Used by Client Accounts
- Social Media Business Use SEC coordination of examinations based on enhanced data
The SEC adopted amendments to Form ADV designed to collect more information about advisers. What will these amendments mean to the way in which you complete your Firm’s Form ADV? What resources will you need to complete the Form correctly? This session will focus on the recent amendments and questions that you need to consider. We’ll consider whether your revised ADV disclosure will impact the disclosure in your marketing materials. We’ll also discuss how these amendments are tied to other Investment Advisers Act Rules, such as recordkeeping.
Portfolio Management & Trading: Compliance Oversight
Oversight of trading and portfolio management is an SEC requirement for an adviser’s compliance program. This session is focused on the tools available to Compliance to determine whether the firm’s trading policies are effective. We’ll discuss skill sets for testing and analyzing trading data and trade blotters, including leveraging exception reports and work done by others. We’ll also discuss what tools OCIE uses to analyze trading, and trading concerns and topics on OCIE’s radar.
Due Diligence of Third-Party Vendors: Understanding What You Need to Do
Required by Regulation S-ID, long-practiced by institutional managers of managers, and suggested by SEC Risk Guidance, due diligence of service providers must be an essential component of every compliance program. Strong due diligence practices can lead to the detection and prevention of risk. This panel will provide tools to make sure compliance is a leader in the management of risks posed by third-parties.
- Inventory Service Providers by Type
- Evaluation of Services and Risks
- Identification of Mission Critical Service Providers
- Plan Essential Reviews
- Case Study: Custodian Due Diligence Best Practices
1:45-2:35 SEC Exam Part 2: What Happens When Regulators Are in Your Office (General Session)
You have assembled the materials that are responsive to the SEC’s examination request letter. The next step is to produce the information to the Commission. Part 2 of Ascendant’s SEC examination track will review what to expect when the examiners are on site in your offices.
While every exam is different, you can take steps to help begin preparations for the data production component, and to make the process as efficient as possible for both parties. We will discuss:
- Putting your best foot forward: the initial meeting and introducing your firm
- Delivering responsive materials to the Commission: what media format should you use; how to you protect your data
- Preparing Management and Employees for Interviews
- Supervising the interview process
- Subsequent document requests: how do you handle them?
- What kind of access should the Staff have to your offices?
Julian Aldridge, Enact
Having a culture of compliance isn’t just something that’s nice to have – it’s a requirement. Regulators are looking more closely at your firms and requiring leaders to create and maintain a culture that actively promotes ethics and compliance, beyond your written policies and procedures. This workshop/presentation will dive deeper into the areas where you have the highest probability of impacting your firm’s culture-through leadership, change management best practices, and tackling constraints through “Can If” thinking. 3:30-3:45 Networking Break 3:45-4:35 Breakout Sessions (Concurrent)
The DOL Fiduciary Rule: Beyond April 10
While the applicability date of the DOL rule remains uncertain, an expanded definition of “investment advice” appears to be inevitable.
Jason will review the differences between the Advisers Act fiduciary standard and the ERISA/IRC/DOL version and provide actionable guidance for broker-dealers and RIAs to prepare to operate under the higher standard, including tips for complying with applicable prohibited transaction exemptions.
Specifically, subjects to be discussed include:
- IRA rollovers and Best Practices for Best InterestTM
- PTEs 77-4; 84-24; and 86-128
- Impartial Conduct Standards and Anti-Conflict Policies and Procedures
- ERISA plan services fiduciary (3(16), 3(21) & 3(38)) and non-fiduciary
Private Funds: What The SEC is Asking in Examinations?
Since the 2010 passage of Dodd-Frank, the SEC has focused increasing scrutiny on private funds. The risks posed to firms examined by the SEC illustrates the need to prepare for such a visit. We’ll discuss what the SEC is looking for, and how it affects firms’ business.
- Private Fund-Specific – Due Dilligence of Administrators
- Independence of Custodial Auditors
Internet of Things: Cyberattack from Inside Your Firm
The SEC and FINRA appear to be taking a strict liability approach to cybersecurity incidents, meaning a breach will likely result in a deficiency at best, and a significant fine and reputational damage at worst. The Internet of Things (IoT) is all around us, and network-connected devices and appliances in every room can contribute to denial of service attacks. In this eye-opening session, the panel will discuss the following and more:
- Are your employees and your devices contributing to your cybersecurity risk?
- Can a fridge or toaster in your firm’s kitchenette be used to take down your firm?
- How can poor security inside your firm may enable cyberattacks from the inside?
- What you can do to lower the risk to your firm
Business Continuity and Transition Planning: What Your Firm Needs to Do
The Rule has been proposed but the expectations for maintaining a BCP plan have been around for some time. Rule 206(4)-7 under the Advisers Act will require Advisers to maintain reasonable policies and procedures. But what is reasonable? How can an Adviser really be prepared? Drill into this new rule proposal and be prepared for BCP 2.0, the next generation of continuity planning. Reassess if your BCP meets SEC expectations. Understand how to plan and document for the transition of an Adviser’s business.
Registered Investment Companies: What the New Rules Mean
With the adoption of new rules for registered investment companies, the SEC has established more ways to monitor RICs. This session will examine what the new rules mean for compliance programs. We’ll discuss:
- Investment Company Reporting Modernization
- Liquidity Risk Management Programs
- Swing Pricing
- Partnering with the RICs Service Providers to Comply with New Rule Requirements
- Leveraging Systems to Gather the Required Data
Understanding Diminished Capacity for Investment Advisers
With the growth of the aging population comes new challenges for investment advisers. Understand the signs of diminished capacity and dementia, and become more knowledgeable on the signs of elder financial abuse. Implementing policies and certain best practices can help investment advisers deal with diminished financial capacity situations more effectively and prepare employees on how to act properly and promptly. Establish ways to protect your aging clients and your advisory firm.
After a full day of learning, wind down your evening by joining us for delectable dining in the light and breezy Grand Lawn Pavilion. Pairing sweeping golf course views with gourmet selections, our dining event promises to instantly transport you to a perfectly tropical state of mind.
7:30-8:30 Breakfast 7:45-8:30 Discussion Groups (Concurrent)
The Next Generation Adviser: Using the Cloud
Is it possible to have an advisory firm that solely uses cloud technologies? What are the key considerations for selecting the right vendors? How do you plan for systems integration to be sure that your various cloud applications can talk to one another? What are the pros and cons of using a Single Sign On (SSO) solution? Are online password managers safe? This discussion group will focus on these important questions as well as considerations for the storage of electronic records in the cloud.
Custody – Reevaluating If Your Firm Has Custody and What To Do
It can often be challenging to determine whether your firm is deemed to have custody of client assets. The key to knowing whether you have custody is understanding the Custody Rule and related SEC guidance. This session will discuss:
- Custody Rule Requirements
- Guidance from Frequently Asked Questions
- Obtaining Inadvertent Custody
- Understanding Your Custodial Money Movement Authority
ACM is a seamless technology platform with built-in efficiencies designed to manage and analyze compliance risks, melding experience gained working with thousands of clients and the Ascendant touch into a technological solution to meet your regulatory obligations. If you want to lower risk and simplify your processes, and if you need more time to focus on growing your business, join us to see what you’ve been missing.
The Art of Performing Risk Assessments
What constitutes a thorough and comprehensive risk assessment exercise? What are the applicable compliance & industry mandates (SEC, NIST, PCI DSS, ISO 27001) for a risk assessment or cybersecurity assessment? What are the core components of such an exercise?
During this briefing, you’ll step through key areas that must be addressed within the scope of a risk assessment exercise. Compliance mandates & information security standards require that a risk analysis exercise be performed on a regular schedule. For example, SEC Rule 206(4)-7 requires a compliance program review annually. Are you wondering what the scope & schedule should be for such an exercise? Further, you’ll gain knowledge of the importance of performing a technical vulnerability assessment as a component of a risk analysis to identify potentially exploitable cybersecurity gaps, and how these concepts can be applied generally to assessing any type of risk.
The risk assessment report identifies key the data points for several critical security works including an enterprise security plan. It also establishes gaps in policies and procedures that must then be updated. This session will also describe remediation actions that must be performed to mitigate risk to the enterprise – and, this risk assessment report will provide the input for an enterprise risk management program. The options that exist for treating discovered risks are examined to ensure consistency & completeness provide the foundation for an enterprise risk management program.
After completing this session, you will be able to:
- Step through compliance mandates & standards for risk assessment (SEC, NIST, PCI DSS, ISO 27001, State regulations, and others)
- Examine core components for a comprehensive & thorough risk assessment exercise
- Walk through a sample risk assessment report to understand key sections such as a Corrective Action Plan (CAP) and other considerations for documenting your findings and recommendations
- Understand how to integrate a technical vulnerability assessment & penetration testing within the scope of a risk assessment
The SEC has completed the onsite portion of the exam. Where does the process go from here? Part 3 of Ascendant’s SEC examination track will review what to expect when the examiners have completed this section of the examination. The final stages of the exam process are in some ways the most difficult ones to navigate. We’ll go through some of the common mistakes and best practices for proceeding in the spirit of cooperation, including:
- The Exit Interview: requesting one and what to expect
- Subsequent Document Requests: the exam isn’t over when the SEC walks out the door. The Commission may request additional information
- The Findings Letter: reviewing and understanding what it says
- The right way to respond to a findings letter
- What if you disagree with the examiner’s findings?
- Findings Letters’ deficiencies are a firm-wide priority: engaging Management
Standards of Business Conduct
A firm’s Standards of Business Conduct are the heart of its “culture of compliance.” This session will review the required elements of a Code of Ethics and other standards of business conduct, such as gifts & entertainment, outside business activities, conflicts of interest and political contributions. Then we’ll consider how Code requirements should be monitored and what technology solutions might be used to oversee and administer your program. And lastly, we’ll address what to do if there are violations of the Code or other Standards.
CFTC and NFA Requirements
SEC registered advisers with exposure to commodities and futures in their managed portfolios need to evaluate their exposure to the CFTC and NFA. Learning what your firm’s options are and how claiming an exemption, or registering with the CFTC/NFA can impact both your firm’s business practices and compliance program.
- Overview of the current CFTC and NFA landscape
- Discuss available exemptions for SEC RIAs
- 4.13(a)(3)- relief where pool trades a minimal amount of futures
- 12-38 NO action relief for funds-of-funds
- Understanding the obligations of exempt CPOs/CTAs
- Initial filing requirements
- On-going filing requirements
- NFA Bylaw 1101
- Ethics requirements
- 4.7 “Registration lite” relief from certain financial reporting and disclosure document requirements
- On-going 4.7 Registration requirements
- Learn about NFA concerns that prompt examinations
The Annual Review-Approaches to Reviewing Your Firm’s Compliance Program
Under the Advisers Act Rule 206(4)-7, advisers are required annually to review policies and procedures to determine their adequacy as well as the effectiveness of implementation. Advisers need to not only have established controls in place but also to measure effectiveness and make sure they’re working as intended. This session will guide you down the path.
- Who Conducts and How to Conduct the Annual Review
- Planning and Documenting the Annual Review
- Testing the Adequacy and Effectiveness of Policies and Procedures
- Reporting Annual Review Findings
- Responding to Issues Identified by the Annual Review
- Common Deficiencies with Annual Reviews
The SEC has shifted resources to improve the oversight of investment advisers, which means the number of exams—and enforcements—is rising. Fiscal year 2016 brought a record number of enforcements against advisers, making the exam process a crucial test for compliance teams. Knowing what to expect and preparing for the visit can help generate the best possible outcome. Unanswered questions on the SEC examination or enforcement process? Here is your chance to tap into on-the-ground expertise and seek the answers to your most pressing questions regarding the nerve-racking topic. End of Conference 1:30-6:30 Charity Golf Tournament (Optional)