SEI Knowledge Partnership
Strengthening Your Compliance Fundamentals: Making Risk Assessments More Effective
White Paper: Strengthening Your Compliance Fundamentals: Making Risk Assessments and Testing More Effective (PDF, 6 pages, 1.18 MB)
Presentation: Compliance and Regulatory Mid-Year Update (PDF, 26 pages, 1.48 MB)
These days, systematic, formal risk assessment and related testing of compliance risk areas is a must-have to design and monitor effective compliance programs and to satisfy the SEC. But, the assessment and testing process is still complicated by a variety of issues and definitional gray areas.
Money managers should be prepared to see less latitude from the SEC related to the use of risk assessments and the evidence of testing in the upcoming annual review period. While the SEC has been fairly lenient thus far, all signs are that they intend to ramp up scrutiny in both of these areas.
An SEI Web seminar offered some guidelines and interpretation from regulatory experts.