COMPLIANCE WATCH: Compliance Burdensome for Independents
Dow Jones Newswire, October 29, 2008
Summary: It is widely expected that regulation of investment advisors will soon fall within the purview of the Financial Services Regulatory Authority. Guy F. Talarico, CEO of Alaric Compliance Services LLC, was interviewed for an article discussing the ramifications for those advisors who leave broker-dealers to start their own companies.
Mr. Talarico noted that “advisors should expect that current rules will be more strictly enforced” and that they “will need to demonstrate their understanding of portfolio trading requirements, portfolio management guidelines and prepare for close scrutiny of valuations, particularly in the case of derivatives. There will be a lot of scrutiny around what investors are offered.”
He explained that “[a]pplying and testing compliance programs is necessary and involves a complex analysis of nearly every facet of the business.” Help can be found from outside sources, however, noted Mr. Talarico, “[f]irms may also contract with consultants and oversight monitoring firms to conduct compliance testing on their behalf. Larger, independent firms may take the added step of outsourcing chief compliance officer functions.”